Encourage Cost Savings by Sharing

medical-moneyA recent article in The Self-Insurer magazine described a very simple, straightforward approach to combating the rising cost of healthcare. It featured an approach a law firm is using to encourage and incentivize employees to utilize more cost-efficient healthcare providers.

The firm provides its members with the data needed to compare costs for various procedures, then shares the savings that accrue to their self-funded health plan when a more cost-efficient provider is selected. In some cases, members have received checks for hundreds and even thousands of dollars. Everyone wins according to the CEO and in the process, members learn that shopping for healthcare can be the responsible and rewarding thing to do.

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Leveling the Self-Funding Field

The article below, titled Leveling the self-funded field, written by Robert Bull, was originally published by Employee Benefit Adviser on July 18, 2017.

Technology is changing every aspect of the way businesses operate — and that includes health plan self-funding.

It used to be that self-funding was limited to only the largest companies that could afford the manpower to either administer their own plans or develop their own proprietary administrative software. Today, new data technologies are leveling the playing field, making it affordable for virtually all employers to self-fund.

For too long HR teams have shied away from self-funding due to the perceived administrative burden. But technology has removed this barrier, making it easier to track eligibility and generate billing information. What used to be a painstaking manual process has been automated, and HR teams at self-funded companies can now provide richer benefits at a lower price. A good healthcare plan goes miles in attracting and keeping quality employees — and ensuring that they’re productive by minimizing absenteeism due to a lack of care for either themselves or their family members.

self-funding'Here’s what to look for when shopping for a top-notch self-funding solution:

1. The ability to consolidate information and manage all healthcare-related data from a single system. Most employers deal with multiple service providers — stop loss, vision, pharmacy, dental, medical, wellness, and third-party administrators, just to name a few. But they should insist that all of the relevant data is consolidated onto one system. For one thing, it’s much simpler and less time consuming to administer and pay all of their providers from a single source. For another, it takes much less time and effort to master a single application — as opposed to having to learn the ins and outs of each provider’s software.

When the data from multiple vendors are integrated onto a single platform, the time-consuming process of having to reconcile across providers every month is eliminated. The plan’s administrator can instantly determine counts and claims. Likewise, multiple payment processes can be eliminated in favor of a single, consistent payment method.

Best of all, HR can take all this data, which reflects employee behavior and everything related to treatment, and use it for predictive modeling. With that level of insight, the employer can develop a plan that truly meets its — and its employees — needs.

2. Data transparency. For an employer to take on the added risk of self-funding, it needs to be able to closely examine its data and determine the underlying trends. Without pricing and transaction transparency, it is impossible to perform a meaningful cost analysis.

As opposed to fully-insured plans, where the data is the property of the insurance carrier, with a self-funded plan the employer owns the plan’s data. And once the employer can access its claims, demographic and pricing information, it can make accurate decisions about what is best for the company and its employees.

The data can also be used to influence employee behavior. By educating a workforce about those behaviors that are wasteful and ineffective, the employer can reap significant savings for itself and its employees. And by analyzing the response rate to different messages and campaigns, HR can then determine what incentives would be useful to obtain even greater compliance.

3. Real-time data access. It’s not enough to have healthcare plan data; it needs to be timely or its utility is diminished. The best way for employers to be proactive is for them to be able to see what is happening with claims and cash flow on a monthly, weekly or even a daily basis. At a minimum, the employer should review its data at least quarterly. And the larger the employer, the greater the number of employees and claims, the more frequently the data needs to be examined.

Three years ago, it would have taken three weeks to scrub a mid-size employer’s claims data. Now it can take just two hours.

4. Safeguards. Data is power. That’s why an employer wants to ensure that only authorized personnel have access to healthcare plan data and analytics. There are legal and privacy considerations as well. That’s why it’s crucial to have robust security that maintains an audit trail of who touches what data and when. In case of an error or a breach, the event can be traced back to the people involved at the moment where it occurred.

Self-funding will continue to be transformed by technology. Cloud-based software is making it possible for ever smaller employers to implement and administer self-funded plans. Embracing and utilizing these tools can lead to lower premiums, greater access to health care and reduced costs for employer and employee alike.

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More Move to Self-Funding

The Employee Benefit Research Institute reports that nearly 20% of mid-sized employers made the jump to self-insurance from 2013 to 2015. A major attraction is the availability of data and analytics, enabling the employer to learn how healthcare dollars are being spent. A growing number of employers are using this data to incentivize employees who lower claim costs by choosing more efficient hospitals or free standing imaging centers when tests such as an MRI are needed.

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House Passes Legislation Protecting Access to Affordable Health Care Options

Press Release from Education and the Workforce Committee Chairwomen Virginia Foxx on April 5, 2017.

The House today passed the Self-Insurance Protection Act (H.R. 1304), legislation that would protect access to affordable health care options for workers and families. Introduced by Rep. Phil Roe (R-TN), the legislation would reaffirm long-standing policies to ensure workers can continue to receive flexible, affordable health care coverage through self-insured plans. The bill passed by a bipartisan vote of 400 to 16.

“By protecting access to self-insurance, we can help ensure employers have the tools they need to control health care costs for working families,” Rep. Roe said. “Millions of Americans rely on flexible self-insured plans and the benefits they provide. Federal bureaucrats should never have the opportunity to limit or threaten this popular health care option. This legislation prevents bureaucratic overreach and represents an important step toward promoting choice in health care.”

“This legislation provides certainty for working families who depend on self-insured health care plans,” Chairwoman Virginia Foxx (R-NC) said. “Workers and employers are already facing limited choices in health care, and the least we can do is preserve the choices they still have. I want to thank Representative Roe for championing this commonsense bill. While there’s more we can and should do to ensure access to high-quality, affordable health care coverage, this bill is a positive step for workers and their families.”

BACKGROUND: To ensure workers and employers continue to have access to affordable, flexible health plans through self-insurance, Rep. Phil Roe (R-TN) introduced the Self-Insurance Protection Act (H.R. 1304). The legislation would amend the Employee Retirement Income Security Act, the Public Health Service Act, and the Internal Revenue Code to clarify that federal regulators cannot redefine stop-loss insurance as traditional health insurance. H.R. 1304 would preserve self-insurance and:

  • Reaffirm long-standing policies. Stop-loss insurance is not health insurance, and it has never been considered health insurance under federal law. H.R. 1304 would reaffirm this long-standing policy.
  • Protect access to affordable health care coverage. By preserving self-insurance, workers and employers will continue to benefit from a health care plan model that has proven to lower costs and provide greater flexibility.
  • Prevent bureaucratic overreach. Clarifying that regulators cannot redefine stop-loss insurance would prevent future administrations from limiting a popular health care option for workers and employers.

For a copy of the bill, click here.

For a fact sheet on the bill, click here.

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The End of the American Health Care Act (AHCA)

Instead of preparing for the changes that were expected from the American Health Care Act (AHCA), employers now need to continue or resume their efforts to maintain compliance with the ACA. As House Speaker Ryan said, “I don’t know what else to say other than Obamacare is the law of the land. It’ll remain law of the land until it’s replaced,” he said. “We’re going to be living with Obamacare for the foreseeable future.”

Determining where we go from here seems to be anyone’s guess, but after watching the industry ebb and flow for decades, our best advice is to stay calm and carry on as self-funded health plans continue to cover an estimated 75% of the U.S. workforce.

ACA The Law of the Land

Until the Republican majority decides to try again or Obamacare implodes, as President Donald Trump and others say is inevitable, individuals and employers with 50 or more full-time employees will have to live with the Affordable Care Act. Many who thought the American Health Care Act (AHCA) meant the certain loss of coverage made possible by the ACA can breathe easier. Providers and employer groups, many of which have adopted self-funding in order to better cope with the added regulations of Obamacare, can take comfort in the fact that drastic change has been avoided, at least for the foreseeable future.

EBSO will be monitoring the events on Capitol Hill and will continue to provide updates as things arise. As always, thank you for being a valued Client and/or Business Partner.

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ACA Fee Moratorium and Self-Funding

acaWhen Congress delayed the Cadillac Tax until 2020, the same law placed a one-year moratorium on the annual fee the ACA imposes on health insurance carriers. While the fee does not have a direct impact on TPAs or self-funded plans, it does sometimes impact stop loss premiums.

Since this fee applied to insurance carriers and not the majority of self-funded plan costs claims, some small group plans that moved to level funding may experience a slight cost increase in 2017. When the tax returns in 2018, the revenue targets are expected to increase. If the tax increases from its previous levels of 3% to 4%, the potential savings available to self-funded and level-funded plans will increase as well.

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Get More from Your Healthcare Spend

spendWith research showing that the average cost of healthcare surpassed $11,000 per employee in 2015, stretching every healthcare dollar is a must. Since self-funding is the foundation from which so many cost control strategies emerge, we encourage you to take this step if you haven’t already done so.

Understand the Needs of Your Group
Since every employer group is unique, it’s imperative that you look closely at demographics, prior claims and medical conditions. The availability of meaningful data is one of the biggest advantages of a self-funded plan, and key to making sure that those with chronic conditions such as diabetes or hypertension are receiving the treatment and attention they need. If your administrator isn’t helping in this critical area, you have the wrong administrator!

Coordination Matters
Self-funded health plans involve several parts that need to be working together. If you think healthcare is complex, put yourself in the shoes of your members and their families. Programs such as utilization review, hospital pre-certification, disease management and healthcare coaching can go a long way in managing costs. Services like patient advocacy and telemedicine can help members get the care they need in an efficient setting. For example, while office visits cost about $130, a telemedicine visit can be equally effective at a cost of about $40. With so many variables available today, it’s easy to see why customer service and care coordination are as important to your bottom line as they are to your employees.

Education and Wellness
Once a self-funded plan design and professional administration are in place, employee education and wellness integration must follow. Few factors influence healthcare costs more than lifestyle choices and the need to make informed buying decisions. And whether it involves understanding benefits or choosing a high quality, efficient provider, studies show that members need more support. To help in this area, many TPAs are integrating online access to comparative data on costs and providers.

When you consider that we can only manage what we can measure, delivering meaningful information to members, when they need to make a healthcare decision, should result in happier, healthier employees and lower costs for all.

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Supreme Court Backs Self-Funded Plans

supreme-courtIn a 6-2 decision on a case involving Liberty Mutual Insurance Company, the Supreme Court, in early March, held that ERISA pre-emption blocks the state of Vermont from requiring self-funded health plans to put claims data into a statewide health claims database.

This decision appeared to be consistent with the original intention of Congress to place ERISA plans under the jurisdiction of the U.S. Department of Labor rather than state insurance departments. In describing the decision as a victory for employer-sponsored health benefit plans that would avoid complications with plan administration, the CEO of the National Business Group on Health stated “while employers support the intentions behind Vermont’s law, we believe that a national approach to rules for all payer claims databases will be more productive and less costly.”

Dissenters, led by Justice Ruth Bader Ginsburg argued that the decision could hamper efforts to provide cost transparency by creating gaps in the data that employers, insurers, consumers, providers and state policymakers need to understand the effects of benefit plans and payment models.

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Obamacare Driving More Companies to Self-Funded Healthcare Plans

The Affordable Care Act (ACA) has sparked a renewed interest and growth in self-funding as more organizations look for ways to continue to offer quality healthcare benefits to their employees, but also create opportunities for savings. Self-funded health plans are not new. In fact, they have been around for decades. However, many businesses have simply been unaware of their advantages and the differences between self-funded and fully insured plan options.

Organizations of many sizes have turned to third party administrators, such as EBSO, to help design, administer and manage a self-funded plan that manages risk and promotes wellness while keeping costs in line.

As Obamacare gives employees even more reason to identify and manage plan costs, TPAs can provide greater access to health plan data and work closely with you and your plan participants to build individualized programs that manage both cost and quality.

In this FREE whitepaper we examine “5 Reasons Why It’s Time to Consider Self-Funding Your Employee Healthcare Plan.”

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Still Still trying to get a handle on the differences between a self-funded and fully-insured plan? Click to watch our short video, Discover the Benefits of Self-Funding and in less than 2 minutes we will explore those differences, give you the advantages of self insured health benefit plan and help you understand how self-funding works.

Self-Funding: A Solution to Rising Healthcare Costs

Nearly two-thirds of employers have made the switch, discovering the many benefits of a self-funded healthcare plan. With Obamacare driving healthcare cost increases, employers need to know they have options in providing quality healthcare benefits – with options that can increase flexibility and expand the services offered, all while offering an opportunity to reduce administrative costs.

Self-funded plans allow your organization to keep any savings that may result from lower claim costs, all while giving you access to better claims reporting and data. As a leading third party administrator, EBSO can help design and administer a self insured plan that works best for your company and your employees and complies with healthcare reform.

Knowing if self-funding is right for your organization can be difficult, but this short video will help you better understand how self-funding works. Let EBSO get you started on the path to a better healthcare plan today!

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