Risk & Business Magazine CEO/CFO Business Today Magazine Fall 2017 | Page 6

HEALTH BENEFIT PLANS

Easing The Transition From Fully Insured To Partially Self-Funded Health Benefit Plans

BY : BOB PACE

Historically for many small- to mid-sized companies , there was only one type of benefits plan available : fully insured , where the insurance company assumed the risk in exchange for co-pays and premiums . When people , even C-suite executives , think about how insurance would probably work , this is the primary option that comes to mind . Fortunately , there are new options .

More and more solutions are coming into the market , allowing many companies , even some with as few as 25 employees , to take advantage of partially self-funded plans . The difference between fully insured and partially self-funded plans doesn ’ t end at the allocation of risk either . Partially selffunded plans provide a way for companies to receive tangible — and in some cases significant — cost savings , better benefits and a slew of tools that they can use to improve their offerings to employees and attract new talent .
Here are the three biggest benefits to a selffunded plan over a fixed cost plan :
1 . Transparency – Being treated more as a partner than a customer allows for much more transparency when it comes to metrics and claims data .
2 . Cost Effective – Most of the benefit spend ( 75 %– 85 %) is variable and remains with the employer if it is not spent on claims . This removes a lot of the overhead and cost that fully insured plans impose .
3 . Plan Control – The tools available to self-funded employers are lightyears ahead of what would be available to employers in a fixed cost plan . This allows for better quality of service and significantly higher claims savings .
With a self-funded plan , a toolbox opens up which allows a slew of savings options for the company while still providing the quality of care that employees need . Among the most useful tools are the following :
• Biometric Screening – This tool involves a short series of questions and tests , including a 49-panel blood test , which can be used to help identify risk factors and serious health problems in advance . Being proactive is always better than being reactive when it comes to health , and this is a tool which can help employees be proactive . For the business itself , catching even one or two cases of cancer or diabetes early and turning them around with positive results is a massive cost savings over time .
• Rx Carve Out – The lion ’ s share of cost increases , in terms of insurance , comes from pharmaceutical companies pushing name brand and specialty drugs on doctors and insurance companies . Rebates from these pharmaceutical companies are offered as an enticement to fully insured carriers . With self-funded plans , rebates are returned to the employers , including the data metrics behind the numbers .
• Concierge Services – By using a phone app or making a phone call , an insured individual can find out the best place to go for treatment . Quality , price and access can vary widely even within 15 miles of a patient ’ s location . If individuals take advantage of this particular concierge service , they can assure that they are utilizing their health benefits most effectively . Member deductibles , co-pays and quality care can be better utilized through these real-time health benefit concierge services .
The above list is by no means exhaustive . There are numerous other tools that can assist in lowering your healthcare spend . Ultimately , the point is that by transitioning to a partially self-funded plan , companies open themselves up to solutions which better fit their needs and , often , their checkbooks as well .
Ninety-eight percent of companies in the United States that have 1,000 or more employees are self-funded . That ’ s because it ’ s the most cost-effective way to provide health benefits to employees . If Fortune 500 companies are self-funded , why shouldn ’ t your company have the same advantages ? That ’ s what partially selffunding with a stop-loss captive can do for you and your company . +
Roundstone ( see @ CaptiveInsurer or RoundstoneInsurance . com ) has a solution which can fit companies with as few as twenty-five employees . The law of large numbers allows you to mitigate your risk and be treated like an employer with many thousands of employees . Give us a call at 440-617-0333 or contact us at info @ roundstoneinsurance . com to find out how you can start making the transition and saving money today .
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