SELF-FUNDING FUNDED PRESCRIPTION YOUR DRUG PLAN DRUG PLAN
BY: JEREMY IMAI AND BONNIE PANG ATLAS INSURANCE AGENCY
Self-Funding Your Prescription Drug Plan
Unlike health care laws on the mainland, the Hawaii Prepaid Health Care Act limits what Hawaii’ s employers can do to control health insurance costs. Administrative rules make it difficult for employers to change health plan benefits or opt for self-insurance. However, prescription drug plans— which are the largest component of health premiums after medical— fall outside of this law. As a result, many employers are wisely considering self-insuring their prescription drug programs— a move that can not only significantly reduce costs but also allow increased flexibility in providing benefits.
While prescription drugs can often help people avoid expensive trips to the hospital, high-priced specialty drugs are driving up overall health care costs and becoming a much greater proportion of total health care spending— rising from about 20 percent to 40 percent over the past several years. These fragile, expensive drugs are increasingly being used to treat complex diseases like diabetes, cancer, and arthritis, driving up overall prescription drug costs sharply.
President Trump has proposed a“ blueprint” to increase transparency and help people better afford their medications. The plan aims to improve competition, lower outof-pocket costs, and create incentives for reducing list prices. Many analysts, however, believe that the plan lacks depth, and even Health and Human Services Secretary Alex Azar admitted that the plan was“ sweeping” and would take years to implement. In addition, several drug industry trends will cancel out many of the proposed benefits— for example, FDA approval of a long list of new high-dollar specialty drugs and introduction of brand drug extensions that add to costs.
We often encourage clients with 250 employees or more to consider self-funding their prescription drug plan— a path that allows employers to regain control over soaring costs— with the help of an experienced Pharmacy Benefit Manager( PBM). The PBM’ s role is to develop and maintain drug formularies, contract with pharmacies, negotiate discounts and rebates with drug manufacturers, and process and pay prescription drug plans. By increasing transparency throughout the process, employers are able to improve cost management and increase savings overall.
Another great aspect of self-funding is the wealth of reporting information that is now available at your fingertips. More in-depth claims information can be used to structure a custom plan that best suits your company’ s needs and develop targeted health programs to support and improve employee health.
Atlas Benefit Consulting reviews your readiness and risk tolerance as well as manages the implementation of selffunding programs, not just for the largest employers but for midsized-to-large employers too. Now, companies with as few as 250 employees can benefit from self-funding— a sea change from the days when the recommended size was over 5,000. Some of the plan features that have attracted clients include the following:
• selection of their own Pharmacy Benefit Managers
• detailed utilization reports to evaluate program performance
• increased ability to develop targeted disease management strategies
• savings through rebate enhancement and decreased administrative costs
• stop-loss coverage for protection from catastrophic costs
For additional information about self-funding your prescription drug plan, contact Bonnie Pang( bpang @ atlasinsurance. com) or Jeremy Imai( jimai @ atlasinsurance. com) at Atlas Benefit Consulting. +
Jeremy Imai joined Atlas Benefit Consulting in 2016 as a Business Development Manager. He has eight years of experience in the health care industry and earned his Bachelor of Arts in International Relations at Hawaii Pacific University.
Bonnie Pang is Senior Vice President and Manager of Atlas Employee Benefits. Bonnie joined Atlas in 2007 and led the development of the Benefit Consulting Practice to complement the already successful Property and Casualty unit. Bonnie has over 20 years of experience in health insurance and employee benefits, working with medium and large employers in construction, hospitality, law, grocery, retail, nonprofit, transportation, and education.
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