Buying or changing health insurance plans is a big decision. With so many products and services on the market, it can be difficult to determine what benefits and services employees want, coupled with the best care options available at different price points. When researching health insurance with their benefits advisors, employers should consider these five key considerations: cost, innovation, affordability, access, and contribution strategy.
Cost is important, but it doesn’t tell the whole story. Too often, the summary analysis of a renewal policy focuses on the net cash impact before and after proposed changes to the design of the benefit plan. There may also be a discussion of the previous period’s experience to determine why claims cost expectations next year are higher and why a rate adjustment (or plan adjustment) is needed. However, just looking at the numbers ignores a huge amount of improvements and innovations that have emerged over the past five years that can have a major impact on the bottom line.
Beyond the cost, there is the broader consideration of the investment and implementation of each health plan in the value-added services taken into account for the renewal and their respective improvement of management capacities. limb care. These capabilities and initiatives should help control costs by proactively identifying and managing potentially preventable events and/or potentially preventable health complications. Moreover, the halo effect of improved (lower) absenteeism and high productivity is just as important as cash expenditure.
Affordability is also important. Recruiting and retaining employees means having competitive health benefits. The trend over the past 20 years has been more to increase deductibles and co-payments and shift the burden to the employee who has probably only reported a modest increase in income over the same period. If employees cannot afford to use Medicare, it has no value and has no impact on their retention. A move to self-funding can save employer benefits expenses, but often has little or no impact on the employee. Similarly, direct contracting strategies may appear beneficial for access to primary care, but expose employees to the risk of significant claims. The same overarching consideration regarding the use of technology and innovation for delivery efficiency and proactive care coordination can also lead to alternative design and pricing considerations that increase engagement and satisfaction. employees while reducing costs.
Don’t look to save money on keeper plan designs. Restricting access to care is not an effective cost management strategy. Some benefit plans require a primary care physician (PCP) or prior authorization to see a specialist. Denial of care and restrictions on access to care have been shown to increase provider and member frustration and have very little impact on cost management. Instead, look for a health plan with greater use of technology that improves access to care and, more importantly, access to a wide range of professionals that maintains quality of care, increases convenience, and improves satisfaction. .
A plan design that incorporates telehealth options for employees will perform better in terms of care management and have higher engagement than one that incorporates telehealth, with separate branding and mandatory copays. A diverse panel of professionals should be part of the telehealth platform. Look for scheduling assistance as well as price transparency and data portability features. A telehealth network with access to specialists like cardiologists, psychologists and oncologists in addition to primary care, physiotherapy and nutritionists will be more valuable to employees and more effective in reducing overall plan costs. This is particularly relevant in addressing the underdiagnosis and undertreatment of mental problems. A diagnosis of a life-threatening condition or chronic illness can be accompanied by stress, anxiety, and even depression, all of which lead to complications and higher medical costs.
The employer’s contribution strategy is an important consideration. A common benchmark for employer cost sharing is generally 70% employer and 30% employee. Budgetary pressures over the past decade have led to alternative designs, including defined contribution strategies and subsidized levels. A defined contribution strategy, where a fixed dollar amount is set, will limit the employer’s share of the cost of health insurance, but it will also produce extreme increases in the employee’s share if plan rates benefits are increased. Consider an individual monthly premium of $550 for an employee, with a defined contribution of $400. A 10% increase in the rate to $605 results in a 37% increase for the employee ($150 increases to $205). Increases in benefit plan costs relative to single-digit salary increases will have a greater negative impact on lower-paid employees. Similarly, subsidized tiers, where the employer chooses a certain tier and pegs its contribution to that cost, either penalizes higher cost tiers (because family coverage is a multiple of employee coverage) or result in a windfall (which is not valued like salary and therefore has less value for employees).
The goal with contribution strategy should be aligned with the intent to manage plan costs from a clinical rather than a budgetary perspective. Which strategy will work best for an employer will depend on many factors unique to that employer, but maximizing plan uptake and inclusion in an innovative health plan will allow for more impact and therefore more savings. As the contribution strategy has a direct impact on affordability, enrollment and satisfaction, it will also impact retention and recruitment.
There are many things to consider when evaluating the best health insurance plans for a business. Going for a cheaper plan seems like the obvious choice, but instead of just focusing on price, it’s important to look at the bigger picture. With the help of your benefits advisor, review each plan’s strategy for innovation, affordability, access and contribution, each of which has a direct impact on costs. Examining all of the underlying factors that affect pricing will help employers choose a comprehensive health insurance plan that provides employees with valuable care options while benefiting both employers and employees.
Chris Gay is the CEO and co-founder of Evry Health.