Dealing with Employer Sponsored Health Insurance Renewals

Transparency

Here are the Top 3 Strategies for Taking Back Control

Employer health insurance renewal. The mere thought of it sends CFOs diving for cover behind their computer screens and CEOs into thinking about early retirement.

PricewaterhouseCoopers estimates that the average increase for employer sponsored health insurance plans will be 6% for 2019*, and while that is welcome relief from the double-digit increases we’ve seen in the past, don’t celebrate just yet. That is still double the approximate GDP, and that 6% increase is still a tax on one of the largest expenses behind salaries and the cost of goods or materials. It’s also, quite possibly, the respite before the storm. Studies have shown that efforts to curb utilization have now plateaued and we have yet to factor in the unknown effects of cost shifting now that the individual mandate has been lifted from ACA. Coupled with medical inflation, could we once again see an unwelcomed race to the top when it comes to renewals?

There are two common reasons why employers hate employee health insurance renewals.

  1. The constant and unpredictable turmoil forces them into hard decisions that impact their bottom lines and employees’ lives; i.e. taking care of business while tweaking benefits always to the lesser side and communicating “less for more” in terms of benefits versus employee contributions.
  2. A feeling that they have no control; they can only begrudgingly react.

Is there nothing that can be done to beat the employer’s health plan renewal angst?

Actually there is. And now, while we are in a momentary trough of rate renewal increases, is the perfect time to take control and prepare your health and group health benefits package for an advantageous future.

3 Strategy Shifts for Controlling Health Insurance Renewals

What it Means for YouControlling Health Insurance Renewals

Let’s face it: We’re all tired of the annual change of benefits and contribution amounts required to keep health insurance cost increases within palatable budgets. These steps are only band-aids on a bigger, annual problem. So instead of constantly fiddling with benefits, here are three meaningful strategies businesses can enact this year to take back control and curb rate renewals, now and in the future.

  1. Shop it…early…and make sure your broker is a team player. It takes time to proactively gather quotes and compare plans, first on an apples-to-apples basis and then for changes you may wish to make. Sitting down with your own broker (and probably others) three months before your renewal date is not too soon. Tell your broker you are looking for three things; rates, company stability and options to curb the renewal increase. Start this discussion with a budget for health insurance, not the other way around. Don’t let the renewal determine your budget. Establish a budget and then have the broker come up with budget-friendly rate options, planning suggestions and alternatives. One of those options should be for a self-funded plan if you are now fully insured.
  2. Internally review your employer health insurance plan, usage and details. It is not enough to offer employee health insurance because “we need to.” Take control and ask yourself a few questions about what you are trying to accomplish with a health insurance package. Don’t just accept the need for health coverage. Think about what it should be doing for you.
    1. Has your workforce demographics changed over the last few years? An aging or younger workforce may mean certain benefits are more or less important today than then they were a few years ago. Do you need benefit options? Which benefits currently being offered (and that you are paying dearly for) are not being utilized? What other areas are lacking? Could
      benefit monies be better spent and appreciated elsewhere?
    2. What is the goal of your employee health insurance program? Is it to attract new workers and retain current ones? With the current labor force tight, competition for talent is fierce and when considering the downtime and cost of a new hire with an average of 6 to 8 months before that person is fully up to speed with your processes and culture, should you enhance benefits in certain areas to look more attractive? If so, shift benefits and monies appropriately.
    3. In today’s environment it probably goes without saying, but make sure you are exercising all of the tax advantaged options you can. Would a HSA, for example, offset some of the bite for employees? Should you offer a tax-friendly HRA? Check these things and others out if they are not already in place.
    4. Consider looking at an insurance carrier or third party administrator that has the capability to offer an actuarial cost projection for any plan changes you are contemplating. Don’t guess at what those changes will do to your budget. Know.

    These steps go beyond simply changing benefits to cut costs. This is exploring your options to make your health plan work for everyone in your company while optimizing dollars spent.

  3. Use a company that works on your behalf to mitigate excessive claims charges. Your claims experience has a direct impact on your renewal. Money paid this year turns into more money paid next year for premiums.Do what you can to drive down the cost of claims now. Carriers and third party administrators that offer claims repricing services, such as ELAP or AMPS, have a phenomenal track record when it comes to keeping claims costs under control.
    1. They are more effective at eliminating payments for overpriced and duplicate facility claims than are discount services, such as PPOs. A 10 or 20 percent discount offered by a PPO is meaningless if the claim is 50% higher than it should be
    2. And while many PPO contracts won’t even let a payer audit a facility bill, claims repricing services do this for you.
    3. At the same time, PPOs and many carriers auto-adjudicate, meaning software reviews the claims. Knowledgeable eyeballs never see them. Therefore a procedure that was knowingly never completed never gets caught, but the bill keeps coming.

    Without a repricing functionality, employers end up paying for exorbitant and unnecessary charges twice; at the time of a claim and in their renewal rates. Ask your broker to explain how any carrier or third party administrator works on your behalf to cut claims costs, and don’t settle for discounts.

And a Nice Benefit To Have

With regulations and guideline updates happening regularly, it is vital to stay informed. One of our focuses has been becoming educated on the details of the healthcare reform action items that affect our customers and brokers.

Here are just a few topics of some recently released guidelines:

  • Use a carrier/third party administrator with technologically integrated services for things like COBRA administration, HSAs and HRAs. This is a housekeeping issue but time is money. If time, steps and frustration are all saved because your third party administrator’s claims services are tied directly to an employee’s HSA account, for example, someone saves time; you save administrative money. And if all you have to do is inform your health plan administrator that someone has left your employment, COBRA notifications, time frames and legally binding administrative duties become a non-issue. While these are not direct health insurance costs they are part of your benefit package, and monies saved here and there do help the budget and make your lif

Take Control of That Health Insurance Renewal

No, you don’t have to go through a group health insurance renewal feeling like you’ve lost control or that fiddling with benefits and contributions are your only options for keeping a health insurance budget in check. And even though we appear to be off of the all-time highs for renewal rates, don’t breathe a sigh of relief and let your renewal go by without being proactive. The meaningful strategies for managing employer health insurance costs today will add up to considerable savings next year.

MBA Benefit Administrators is in the business of saving employers money on their employee health insurance with advantageous strategies and partially self-funded plans which typically start with first year pricing at a maximum expense of 75% of a fully insured plan. And because of the effectiveness of strategies we put into place, more often than not renewals go down…not up…proven by the fact our average client retention is 12 years.

Get to know us!

Leave a Comment





...with powerful health care and claims management systems to save them money.
We believe your investment in a health plan should be treated like any other aspect of your business, with upfront knowledge of the costs and all attempts to weed out waste. MBA saves employers more than nickels and dimes with many methods of management, including: Metrics Based Pricing: Why rejoice over a 30% discount on a claim that is 1000% too high? Metrics Based Pricing reduces claims to a “cost of service + reasonable margin” level by auditing claims for unfair markups and inaccurate or fraudulent billing. This results in an average $1500 per employee savings – AND WE DO IT WITHOUT RESTRICTIVE NETWORKS! Medical Management Services: Proven to reduce hospital admissions and the average length of stay. HealthSteps™: Wellness plans and initiatives that do make a difference in the overall health of your workforce and drive down health claims. Prescription Benefit Management: With an average reduction of 9.4%. Internet Prescription Bidding: Allowing employees to save up to 87%. Actuarial Projecting: The projection of benefit costs and savings is one of our underwriting core competencies. Go ahead – suggest benefit changes, add or drop a plan component, change eligibility: MBA will accurately determine the financial impact on the plan and offer suggestions to tweak the benefits to suit your objectives. We offer the facts then you call the shots.
×
We're neighbors you can talk to...
Where else can you get a direct line to a claims adjudicator, plan manager or even the President of the company? Only at MBA Benefit Administrators. We’re the big third party administrator for health plans with personal service that you can only wish others would provide. Like talking to a friend over a fence, we have that neighborly feel…but we provide world class advantages.
×
With “outside the box” flexibility in health plan administration…
Since 1987 MBA Benefit Administrators has successfully served large and small employers, public entities, associations, tribal nations, school districts, non-profit organizations and insurers. We have the capability to administer anything from single-plan 25-life groups to complex employee organizations with multiple medical, dental and vision benefits or employees in multiple states. We also provide a wide array of ancillary services such as COBRA and HIPAA administration and HSAs. When you discover:

  • The depth of our experience
  • The flexibility we offer in benefit design
  • Our commitment to technology to make your life easier
  • Our can-do attitude toward service

 

…we’re confident you too will see why MBA is a national leader in third party administrative healthcare benefits.

×
…and we prove real solutions do exist for escalating healthcare costs.
We’ve received national kudos for our multiple, proven strategies which reduce claims and plan costs without harmful benefit reductions for our clients’ employees. Proof of MBA’s effectiveness in this is in the numbers. Our clients see:

  • An immediate average reduction of up to 25% in maximum health plan costs the first year,
  • Flat renewals after that, and because of this and our commitment to impeccable service…
  • Our clients remain with us an average of 12 years…an unheard of accomplishment in the health insurance industry.
×
…and state-of-the-art technology for painless administration and integration of services, we make your life easier.
No one thinks about making your life easier and more efficient than MBA Benefit Administrators. Our technological investments are totally integrated across services so that employees and employers – with HIPAA-compliant and appropriate need-to-know safeguards – can view at a glance their standing for benefits, claims, plan reporting and other services. These advancements provide:

A Comprehensive On-Line Enrollment Wizard: Employee self-enrollment or HR department enrollment methods, including ancillary program enrollments and billings.

HR On-line Capabilities: View, adjust and approve on-line employee eligibilities; check claims status, print reports and plan documents all from one place.

Multiple Employee Access Channels: Employees can view on-line their claims status, eligibility and account balances of reimbursement plans such as HRA, HSA, Flex and Executive Reimbursement plans. In addition, we offer all employees our MBA App, where they can:

  • Carry a virtual ID card,
  • Check on the status of a claim,
  • Submit secure documentation to MBA,
  • Contact our support team,
  • …and more!

On-line Document Management: In one place view specific documents such as:

  • Plan Documents
  • Temporary ID Cards, and
  • Employee Communications and Forms

HSA Services Integration: MBA seamlessly integrates HSA plans with HealthEquity Services. Claims information is electronically transferred from MBA’s claims system to HealthEquity employee accounts. There is no need for paper claim filing or second-guessing the eligibility of expenses. Even employee eligibility is updated through MBA data feeds.

HRA Reimbursement Plans: MBA’s administration processes allow clients and their participants to rely on accurate and timely processing of reimbursements. Eligibility, billing and remittance of claims, integrated scanning and storage allow for real-time remote access.

Section 125 Flexible Spending Plans: MBA Benefit Administrators coordinates with employers to offer Section 125 Flexible Spending administration and help employees save money on medical expenses. Providing this benefit for your employees is like getting a 30% discount on Medical Premiums, uncovered medical expenses and dependent care.

COBRA Administration: MBA Benefit Administrators can handle all of your COBRA requirements. We will mail and track notifications, coordinate COBRA payments, receipts and reporting and ensure claims match “paid through” dates, plus give you on-line access to all activities.

×
At MBA employers are cared for too…
MBA goes the extra mile to ensure that as an employer your health plan does not complicate your life. We give you things like:

  • Business intelligence for advanced reporting and critical analysis of your plan’s performance, costs, payouts, claims analysis and large claims submitted for insurance.
  • Billing and Funding services integrated with enrollment, customized to your specifications and handled electronically.
  • Account balancing systems produce cost accounting reports and perform bank reconciliation activities, available for review at any time.
  • And the ability to review multiple reports regarding your plan; check registers, active employee reports, YTD recaps, claims reviews and lots more.
×
1. It’s an “easy in”.
Almost every larger employer (50+ employees) annually shops their company’s health insurance. Rapidly rising rates and diminishing benefits have traditionally caused them to shop this aspect of company insurances more than any other.

With very little work this easily opens a lot of doors you wouldn’t otherwise get through. Furthermore, local employers like local expertise. They welcome the neighborhood broker who can answer service questions or help with the employee enrollment process. All you have to do is be ready with competitive products at the appropriate time.

×
2. Group health opens the door to other profitable sales.
There are a lot of needs that are begging for solutions within the corporate world, whether that world employs 50 or 5,000. CEOs and business owners want to retain key employees or prepare themselves for the future. Employees need guidance during life changes, such as an impending retirement, the buying of a new house or the birth of a child.

If you wander the halls of your group clients under the guise of service, you’ll be surprised what you uncover and how much more you can sell – just because you’re accessible.

With very little work this easily opens a lot of doors you wouldn’t otherwise get through. Furthermore, local employers like local expertise. They welcome the neighborhood broker who can answer service questions or help with the employee enrollment process. All you have to do is present your own insurance lines and solutions – the same products you currently sell – when the need arises…and it will!

• Key Person Insurance
• Buy/Sell Agreements
• Deferred Compensation
• Disability
• Estate Planning
• Retirement Plans
• P&C Products – Both Business and Personal

…the list could go on and on. MBA doesn’t provide these products, but with the group health business already captured you’ll be in a position to favorably present your own policies and services.

Each easy cross-sell has the potential to be very profitable as now you, the group health broker, are a trusted resource. Make one sale and it won’t be long before everyone wants to talk to you just because you are the tacit face of insurance within a group client’s company.

×
3. The larger group health market offers long term financial stability.
It is a proven fact that the more products you have in place within a group the less likely it is that some other broker will be stealing your business. With a competitive group health plan, a passion for service and additional products in place, employers think twice about switching brokers. MBA, for example, has an average client retention rate of 12 years.

Group health is rarely a stand-alone product. With today’s tax codes a group health plan almost always immediately calls for HSAs, COBRA administration and the like. In addition you’ll be finding a lot of ancillary sales.

That’s a good, stable building block for a broker’s income. Year after year the same commission is paid the broker and year after year the deep well for cross-sells keeps on giving.

In the meantime, adding new groups just keeps the broker’s income growing to the upside.

×
4. Commissions are recurring and high, perhaps higher than any other product line.
To put things into perspective:

• What’s the average commission on a home owner’s or auto policy?
• How often do you dig up on your own a million dollar life policy or high 6-figure annuity?
• How easy is it to scrape up new business?

Contrast that with the group health broker. MBA, for example, pays brokers handsomely (on average $25 per employee per month) for every group they sign up. On top of this are your multiple cross-sells for several product lines. With a good base group health income and constant cross-sells, a commission from one group can rack up quickly.

×
4. Commissions are recurring and high, perhaps higher than any other product line.
To put things into perspective:

• What’s the average commission on a home owner’s or auto policy?
• How often do you dig up on your own a million dollar life policy or high 6-figure annuity?
• How easy is it to scrape up new business?

Contrast that with the group health broker. MBA, for example, pays brokers handsomely (on average $25 per employee per month) for every group they sign up. On top of this are your multiple cross-sells for several product lines. With a good base group health income and constant cross-sells, a commission from one group can rack up quickly.

×