Howard E Deihl, RHU
5 Ways to save money on your benefits in
1. Look into a level-funded group health policy
Level funding is not for everyone. Level funded group health plans require medical underwriting. In almost all cases, each covered employee is required to complete a medical questionnaire. Questionnaires are used to determine the health of your group as a whole, and the underwriter will asses a "load" if necessary.
DO NOT assume your group is too unhealthy for level-funding. Insurance companies are competing for your business and will negotiate to earn your business. Why have you not seen a level-funded plan? These plans require more work to explain and underwrite, but in the end, you can save thousands in premiums.
2. Consider an HMO
Lower cost and less exposure to non-network charges compared to a traditional PPO. The most common objections to an HMO are the confinement to the network, referral requirements to see a specialist and, the lack of non-network benefits. However, the absence of non-network benefits can work in your favor when it comes to surgeries. Many patients have been charged a separate deductible, out of network co-insurance and, reasonable and customary charges for services performed by out of network providers who assist in surgeries even when performed in an in-network facility.
3. Referenced-based pricing policy
Referenced based pricing (RBP) polices are structured the same as the traditional PPO and HMO plans except for the network. RBP policies reimburse the providers based on Medicare reimbursement rates instead of pre-negotiated network rates. In other words, the claims are negotiated by the insurance company or third-party administrator (TPA) after the clams are filed. Although the insured may have some risk of a balance bill, a good TPA can eliminate them, or pay them at a higher rate.
4. Consider replacing your HSA, HRA or FSA with a gap plan.
These funding options have emerged to help employees manage their out of pocket medical expenses when enrolled in high deductible health plans, and they are still excellent options. However, predicting an insured's exposure is almost impossible. To fund an HSA or FSA for a $2000 annual exposure will cost $166.66 per month, and funding an HRA is less predictable, and all have monthly administrative fees ranging from $3 to $12 per member per month or more. A high-quality gap plan can cost $20 to $50 per member per month, depending on the coverage selected and the demographics of the group.
5. Get a second opinion
Competition lowers cost. That goes for brokers as well. When a broker knows you are shopping with another broker, they are inclined to work harder to earn your business. Remember to "go home with the person who brought you to the dance". In other words, go with the broker who has found you the plan. Odds are they have more experience with the plan they are proposing.
Avoid "agent of record" (AOR) letters - Unless your current agent is doing a poor job, do not give an agent of record letter to a random agent. If the agent who installed your health plan specializes in health insurance, stick with him or her. They are familiar with your employees and your plans.
Small brokerages vs. big brokerages - Your business is big to you no matter what the size. To a big brokerage firm, your company may only represent 1/10000 of their block of business, but to a small brokerage, your business is extremely valuable and represents a more significant portion of their block of business. Also, a large brokerage has employee turnover in both producers and administrative staff. In contrast, an independent agent will know the needs and challenges of your business throughout his or her career.
Go with a specialist - there are banks, payroll companies, employee leasing firms and, others that are licensed to write group health insurance. Make sure you are dealing with a benefits specialist who handles benefits full time.
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