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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