Risk & Business Magazine General Insurance Services Magazine - Page 6

HEALTH INSURANCE
BY : ERIC GIBSON GROUP BENEFITS EXECUTIVE ,
GENERAL INSURANCE SERVICES

Seven Options To Consider To Combat Rising Health Insurance Costs

With the cost of health care continuing to rise , many employers have asked us about alternatives to traditional health insurance plans . High prices are driven by a number of converging factors , including higher costs for pharmaceuticals , increasingly sophisticated technologies , reduced supplies of care providers , and an aging population — and no end to the upward trend is in sight .

There are options for those seriously considering cancelling their employee health plans — and some may be worth investigating for your business . Here ’ s a rundown of the seven options we offer these frustrated CEOs :
1 . Plan cancellation . Few in our experience have chosen to implement this option — which sends employees out to fend for themselves in individual markets — but it is no-doubt tempting whenever new premium increases are announced . For competitive reasons and to keep their employees happy , most companies try their hardest to avoid this fate .
2 . Fully insured grandfathered plans . Some companies can experience transitional relief by adhering to a grandfathered plan that was in place before implementation of the Affordable Care Act ( ACA ). This can save them considerably , mostly because they can avoid some of the ACA ’ s
6 mandatory provisions , such as pediatric dental and vision care . The downside is that companies are not allowed to change their policy whatsoever , so no improvements can be made to the plan either .
3 . Fully insured ACA-compliant plans . These are the standard fully insured “ open market ” plans that insurance companies offer . The plans have all the mandated Affordable Care Act provisions and are community rated in small group . Large group is still medically underwritten but also provides the ACA mandated changes .
4 . Association plans . In October 2017 , President Trump signed an order that expanded the ability of small trade and business groups within an industry to band together to purchase health insurance ; however , there has to be a direct business connection between the companies . This allows small employers to come together and be treated as a large group so their plans can be medically underwritten , although association plans prohibit outright denial of coverage or discrimination against those with preexisting conditions .
5 . Self-funded plans . Under this scenario , a portion of claims are paid directly by the employer . Although an element of risk is involved , this option offers great flexibility in terms of plan design . For example , you can choose to create employee wellness and prevention plans to help reduce costs and keep your workforce healthy . With a self-funded plan , you can monitor claims closely and have a more vested interest in your employees ’ overall health . In addition , you don ’ t have to pay a state premium tax , so you can save money at the outset .
6 . Captive insurance . With a captive plan , several self-insured employers band together to form their own insurance company . This option is geared mainly toward larger companies of 100 employees or more , offering the owners potential dividends and an incentive to develop an all-around healthier workforce .
7 . Professional employer organization . These health plans have lost favor over the past several years because they force employers to relinquish control of their organization to a third party that administers HR and benefit responsibility for a collective group of companies . For those that can accept this limitation , this option is ideal for employers that want to spend more time on their central mission without the burden of administrative concerns .
Eric Gibson has been with General Insurance Services for nearly five years , where he specializes in group benefits for organizations of all sizes . Outside of the office , Eric enjoys spending time with his wife , Sidney , and daughter , Zoey .
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