With time running out on an opportunity for Congress to repeal and replace the Affordable Care Act and open enrollment season approaching, thousands of small and mid-sized businesses are likely bracing for another round of premium increases. A growing number of employers, however, will choose to avoid the uncertainty plaguing traditional group insurance markets by moving to a self-funded health plan – an option that provides an opportunity for savings and far more plan design flexibility.
Healthcare benefits continue to be perhaps the biggest obstacle facing small and mid-sized businesses. The Self Insurance Institute of America reports that between 2011 and 2016, the average annual deductible for employer-sponsored plans increased by 49% and the percentage of firms with fewer than 200 employees still providing health benefits fell from 68% in 2010 to 55% in 2016.
Self-funding on the other hand, has proven to be a far more responsible alternative for employers, enabling thousands to not only use their health benefit plan to attract and retain high quality employees, but to do so at an affordable cost. While self-funding has long been a staple for the nation’s largest employers, nearly a third of companies with 200 or more employees now offer at least one self-funded option.
Everyone Benefits from Flexibility
There are many reasons for the growth of self-funding, with flexibility and access to valuable claims data high on the list. Since self-funded plans are governed by ERISA, they avoid many of the costly mandates governing fully insured plans. To manage risk, stop loss coverage is obtained to cover claims that exceed anticipated levels. If claims are below anticipated levels, the plan retains the savings that would have been paid to an insurance carrier in the form of non-refundable premiums. Benefits can be customized to meet the unique needs of the group. When an independent TPA is engaged to administer the plan, claims data can be analyzed to identify chronic conditions and other key cost drivers. Services such as telemedicine and mobile transparency tools can be added to make physician access more convenient and more affordable. From plan design to data analysis, everyone benefits from the flexibility that a self-funded plan can provide. It’s the biggest reason why more small and mid-sized companies continue to move to self-funding with help from an independent TPA.
Health savings accounts are hot, with nearly two-thirds of respondents to a Plan Sponsor Council of America survey saying they believe that even those without a high deductible health plan should qualify. A benefit often cited by employers and employees alike is that HSAs can be a valuable part of one’s retirement strategy, since healthcare expenses are viewed as one of the largest people face in retirement.
Experts agree that a lack of true price transparency has contributed significantly to the inefficiency in healthcare. Several websites compare the costs for certain procedures at varying hospitals, but it’s still very difficult, if not impossible, to make an informed choice when preparing for a non-emergency procedure. As a result, most people still go to doctors participating in a covered network and follow physician referrals when a specialist is required. In most cases, these choices are made without any knowledge of the cost.
Powerful Mobile Technology
Today, leading TPAs are providing self-funded health plan members with a variety of very powerful mobile transparency tools. One new mobile app enables members to identify fair pricing for more than 200 common procedures, including surgeries, imaging and diagnostic testing. By linking a rewards program, the app awards financial incentives when high quality, competitively priced providers are selected over those with lesser ratings.
Another software maker that describes a third of healthcare procedures as “shoppable”, has introduced a mobile app that enables plan members to search for physicians by procedure, location and price. This tool even goes beyond facts and figures to provide detailed descriptions of the procedure being searched. When members need further assistance, care navigators are available to provide online support via a live chat option.
Expert Administration Still Matters
While a totally open pricing system may never be possible in a business as complex as healthcare, TPAs are making self-funded health plans more transparent all the time. Strategies such as Reference Based Pricing and Concierge Health Advocacy are having a tremendous impact on cost and employee engagement. And while insurance carriers typically withhold claims data from fully insured groups, TPAs are experts at helping their clients put valuable claims data to work to identify cost drivers and manage chronic conditions in ways that help the plan avoid catastrophic claims in the future.
As the transition from volume to value-based healthcare continues, more responsibility will land in the hands of plan members. Smart employers know that a well-designed health plan can foster positive change and lower costs only if members understand their benefits. As long as self-funded plans, highly personal service and creative ideas are allowed to flourish, the number of engaged consumers capable of making economically wise healthcare decisions will continue to grow.
If you haven’t interacted with a doctor by smart phone, email or webcam recently, you’ll be interested to know that the American Telemedicine Association reports that more than 15 million Americans received some kind of medical care remotely last year.
For those employed by a large company or living in a major metro area, it is common to view telemedicine as a virtual doctor visit or a substitute for an in-person office visit. The fact is that electronic communications are impacting the delivery of healthcare in many ways.
- Some doctors are consulting with one another to make critical decisions on heart attack and stroke victims
- Patients are using smart phones to relay blood pressure, heart rate and other vital signs to their doctors in order to better manage chronic conditions
- Virtual Care Centers are providing remote support to ICUs and ERs in small, rural hospitals where a physician may not be on site 24/7
Many question whether the quality of care is keeping pace with the rapid expansion of telemedicine, and state rules governing telemedicine are constantly evolving. At the same time, health plans and a growing number of members view the services as a convenient way to get medical care without leaving home or work.
The AMA recently approved new ethical guidelines for telemedicine, calling for participating doctors to recognize its limitations and ensure that sufficient information is available before making a clinical recommendation. With existing telemedicine providers expanding and major teaching institutions gearing up, there appears to be no slowdown in sight.
These days, managing an employee health benefit plan is NOT just that – companies face numerous reporting and compliance challenges that are continuously changing, which, in turn, has changed the game. And, the Affordable Care Act (ACA) has only upped the ante.
At EBSO, we have a full-time Compliance Department helping our clients with these challenges, guiding them through the rapidly changing ACA requirements and avoiding costly penalties. Our Standard ACA Compliance Services include your basic plan General Notice Requirements as well as mandated ACA reporting techniques and fees. From the Children’s Health Insurance Program (CHIP) Reauthorizations Act of 2009 to Patient-Centered Outcomes Research Institute Fee (PCORI) calculation, our health care reform compliance services help ensure that self-funded employer groups stay ahead of the game.
As a full-service third party administrator (TPA), EBSO offers all the ACA compliance resources necessary in today’s regulatory environment – from a comprehensive range of Health Care Compliance Management Solutions for our self-insured medical administration clients to a freestanding suite of ACA Reporting Services available to any employer group, regardless of how the plan is funded or administered.
With all these options, trusting EBSO to be your expert is a safe bet! To learn more and view a full list of Standard Compliance Services we offer, visit our website at: http://www.ebsobenefits.com/compliance-management.html.
You might wonder why this question at this time of year, but that’s exactly the point. Now that crunch time and the pressure of renewal are behind us, take a deep dive into your health plan to learn where your health care dollars are going.
Performing a checkup on your health plan means reviewing data on claims and utilization. While employers with fully insured plans may lack this data, those who self-fund should have reports that identify how your company and your members have benefitted from the plan. More importantly, reviewing claims and utilization data can help determine if any patterns are developing that might call for additional health screenings or wellness measures. Finally, it’s a good time to see how your plan is performing compared to national or perhaps regional trends.
Put Your Information to Work
Many employers are simply not aware of what is available to them in terms of data. Others know they have the data but don’t know what to do with it. That’s where the right TPA can help. Our data analysis and custom reporting capabilities help our self-funded clients analyze plan performance and benchmark data to compare diagnoses, procedure costs and utilization patterns.
These tools can help employers and advisors forecast future plan costs and take steps to contain future costs. Plan design changes, chronic disease management, health coaching – these options and many more can help when plan information is analyzed and understood. Resolve to put claims data to work for your health plan this year. Your members will enjoy better benefits and your plan will be much more efficient.