This article was published on September 4, 2018 on BenefitsPro, written by Cort Olsen.
How do you make clients understand that fully insured plans are costing them hundreds of thousands dollars a year?
With premiums constantly on the rise for employers offering fully insured health plans, brokers are searching for ways to convince their small and mid-size clients that switching to self funding can cut costs on their top line items.
Switching to one of these plans means that the employer assumes more risk, with stop-loss insurance providing financial protection against catastrophic claims. They can also pay medical claims as incurred as they would other corporate expenses, or can deposit expected or maximum costs into an account each month.
There are many ways brokers are going about convincing their clients to make the leap, from educating them on the cost of the medical loss ratio, highlighting the financial pressure health care is placing on their business, or just making them feel as uncomfortable as possible by explaining their fully insured payment methods.
Bob Gearhart Jr., partner at benefits brokerage DCW Group in Boardman, Ohio, says explaining the MLR and how it guarantees fully insured premiums will rise is a great starting point when initiating the conversation.
“Benefits is one of the few areas the CFO has not optimized and they are feeling pressure from the CEO to drive earnings to the bottom line,” Gearhart says. “This organizational pressure coupled with health care in the headlines is slowly changing the buyer within the organization.”
Gearhart adds that leading HR professionals recognize this and proactively engage the C-suite in the buying decision.
Robson Baker, employee benefits and HR adviser for Clarus Benefits Group in Houston, Texas, says getting the C-suite and HR through the awareness phase of the conversation is the hardest part.
“The broker needs to educate and bring the pain points to the forefront of their minds,” Baker says. “Then it moves to consideration — which can be led by a strategic CFO and compassionate HR department.”
Framing health care cost as a financial decision allows the broker to approach the CFO first and then bring the self funding plan down to HR and out to the other employees. Continue reading