Category: Employer/Broker Relationship

By Sonus Benefits,

Is a Pharmacy Carve-out Right for Your Group Health Plan?

Pharmacy spend in the US is significant. Six in ten adults tell KFF.org they are currently taking at least one prescription drug and a quarter say they currently take four or more prescription medications.

PwC’s Behind the Numbers predicts a 6.5% medical cost trend in 2022, while drug cost trend reports show ongoing increases year over year and make up 20% of overall medical costs for employers.

Besides the cost burden on employers, employees can find that certain medications are not covered by their health plan. This increases pressure on employers to develop a sustainable strategy that provides cost-effective pharmacy benefits.

As a solution, many employers consider pharmacy carve-out plans as an option; however, carve-out plans are debated vigorously by health plan experts. By understanding what a pharmacy carve-out is and considering important factors, employers and brokers can work together to make the right decision.

What is a pharmacy carve-out?

A pharmacy carve-out is when an employer separates (carves out) their prescription drug benefits from their medical plan and contracts directly with a pharmacy benefit manager (PBM). A pharmacy carve-out is commonly used under the self-insured model. In comparison, fully insured medical plans typically have the pharmacy benefit as a built-in feature (bundle).

Advantages

Pharmacy carve-outs can provide transparency, flexibility, control, and accessibility to employers in the form of:

  • Better control over pharmacy benefit costs.
  • Access to the costs and data to evaluate program performance.
  • Greater flexibility to customize solutions in plan design and clinical programs to help reduce costs.
  • Standardized language in the PBM contract to allow increased transparency into pharmacy benefits, allowing employers to better understand and control spending, negotiate better deals, and ensure the program performs as promised. The contract itself can allow:
    • Access to pharmacy claims data.
    • Audit rights, such as a claims audit, operational assessment, and rebate audit.
    • Annual review to ensure rates are competitive.
    • Service performance guarantees.
    • Credits to help cover administration expenses or costs incurred when switching to a new vendor.

Disadvantages

There are a lot of variables that affect whether a pharmacy carve-out is the right solution for your company. It’s critical to understand the disadvantages of carve-outs before making your next move:

  • Carved-out plans offer short-term savings, though the savings might not be beneficial to an employer over the long term.
    • A July 2021 study compared the costs of bundled and carve-out plans and found that bundled pharmacy benefits are associated with reduced medical expenditures over the long term, resulting in annual per-member, per-month savings compared with a carve-out.
    • Another study found that savings from a carve-out plan may seem beneficial on the surface, but medical costs are 7.5 times higher in the long run. Therefore, any savings promised by a carve-out should be weighed against potential increases in medical spending by employers.
    • Managed Healthcare Executive also reported carve-outs could deliver short-term savings, but not long-term savings, due to PBM vendors’ approach to utilization management. For example, many employees are denied access to their prescribed medications and are unlikely to have their denial overturned on appeal. This results in employees paying for medicine out-of-pocket, added costs for employers if they pay multiple vendors, and a poor member experience overall.

Besides long-term costs, carve-out contracts for medical and pharmacy require multiple vendors, increasing the administrative burden on the employer.

Thoughtful considerations

After reflecting on the advantages and disadvantages of carve-outs, making the decision may still be no small feat. Fortunately, you can ask yourself important questions to help you with your decision.

  1. How much are pharmacy benefits currently costing your plan?
  2. How are you currently overseeing the pharmacy benefits program?
  3. What changes would be necessary for the new arrangement?
  4. How will the fees from your medical health plan vendor be impacted?
  5. Is now the right time to search for a PBM vendor (and possibly a medical health plan request for approval)?

When deciding to carve-out pharmacy benefit programs, employers and brokers should work together to consider critical factors such as internal staff expertise, current and future costs, and appropriate timing. However, your top consideration should be, “Does this make the most sense for our organization and our employees?”

 

Content provided by Q4iNetwork and partners

Photo by volody10

By Sonus Benefits,

Fully Insured and Self-Funded Plans: The Pros and Cons

In our blog published a couple of weeks ago, we delved into the three different types of group health insurance plans: fully insured, level-funded, and self-funded. As you’re researching the best kind of group health insurance plan for your business, let’s focus on the two opposite ends of the spectrum and see how they compare: fully insured group health plans and self-funded group health plans.

Defining the plans

Fully insured

As a reminder, a fully insured plan is what people typically think of when they think of employer-provided health insurance. Employers purchase the plan from an insurance company (carrier) and pay a premium to the insurance company. When employees make a claim, the insurance company writes a check to the healthcare provider. Employees pay all the deductibles and co-pays.

Self-funded

In a self-funded plan, the insurance company provides all the administrative services, with a fixed cost for administrative fees. Self-funded plans are fully funded by the employer, who pays for employee claims from a bank account or trust fund set up for that purpose.

The pros and cons of fully insured health plans

Pros

Employers looking to keep their costs consistent will have fewer cost/rate variances month to month because of fixed premium costs.

All claims are managed by the insurance provider, which keeps the employer’s involvement in the day-to-day management at a minimum (and this also makes fully insured plans faster to implement). Employers also benefit from the insurance company taking on all the costs associated with employee medical claims. Employers and employees alike can feel confident knowing their premiums during the plan period will not change even if there are many claims in any one year.

Cons

While costs are consistent from month to month, employers must either accept the community rate if they’re a small group and or negotiate their rate with insurers each year if they’re a large group. Rates are determined with the following criteria in an underwriting process:

  • Company size
  • Employees’ health conditions
  • Claims experience (number of claims filed by employees last year)
  • Loss ratio (claims cost divided by the premiums collected)

These criteria can determine whether the following year’s premiums are higher or lower. Premium taxes are also higher with fully insured plans. And if you are looking for a plan with benefit design flexibility, fully insured plans often aren’t customizable to the degree an employer would prefer.

The pros and cons of self-funded plans

Pros

If the idea of assuming all financial risk sounds…well, risky, purchasing stop-loss coverage helps with those risks. You will also get additional savings if you have a low number of claims in any given year. Self-funded plans offer the greatest amount of flexibility and oversight, as you manage employee claims and can select which benefits you offer in your plan.

Cons

Not having the insurance company take all the risk when it comes to paying claims may leave you feeling uncertain about claims costs. Also, if your business does not have a stable cash flow, cost fluctuations due to employee claims can be stressful. Especially if you choose not to have stop-loss coverage, which can leave you potentially paying a great amount of money when it comes to employee medical claims.

While a self-funded plan is more hands-on, there are specific and additional compliance requirements such as non-discrimination requirements and 5500 tax filings. Also, as self-funded plans require a more hands-on approach, employers without the time or resources may find them difficult to manage.

Look at all sides

Fully insured and self-funded plans are two different sides of the coin. Be sure and take the time to talk to a trusted advisor to help you fully iron out the differences and take the next best step for you, your business, and your employees.

 

 

Content provided by Q4iNetwork and partners

Photo by stanciuc

By Sonus Benefits,

A Crash Course in Group Health Insurance Plans

When it comes to health insurance, people want the right amount of coverage. They also want coverage for what they see as high value (doctor’s visits, medical procedures, etc.). There are many insurance plans out there—the traditional fully insured plan, the level-funded plan, the self-funded plan…and you may be wondering what the difference is between them, and where to even begin.

Welcome to our crash course in group health insurance plans.

Where it all began—fully insured plans

Fully insured plans are probably what come to mind when you think of group health insurance plans. Employers get the plan from an insurance company (carrier) and pay a premium to the insurance company. The yearly premium rates depend on how many employees are enrolled in the plan. When employees make a claim, the insurance company writes a check to the healthcare provider (hospital, doctor, etc.). Employees are responsible for paying the deductibles and co-pays defined in the plan.

A fully insured plan usually includes coverage for medical procedures, prescriptions, and doctor’s visits. Employers tend to go the route of fully insured for their business if they want to give their employees predictable benefits that remain consistent over time and provide the business with a regular monthly fee to manage cash flow.

New paths and steppingstones—level-funded plans

Level-funded plans are the go-betweens, the bridge between a fully insured plan and a self-funded plan (which we will discuss in a minute).

With level-funded plans, employers pay a set amount of money each month to the insurance company that funds a reserve account for claims and manages administrative costs and fees. Rates for a level-funded plan is defined by the number of employees and the estimated cost of anticipated claims. If the employer has a surplus of claims funds at the end of the year, they will receive a refund. If the claims are higher than estimated, they will receive a premium increase for any stop-loss coverage an employer has.

Employers usually choose level-funded plans if they anticipate employees not making many insurance claims and want to offer their employees insurance at an affordable cost. It also allows ease of access to utilization trends that show where employees might be overspending and allows employers to use education and wellness programs to improve claims costs.

Rise in popularity—self-funded plans

The popularity of self-funded plans is on the rise. A report published in 2020 found that 60% of workers in companies with three or more employees were on some kind of self-funded plan. But how does it work, exactly?

With self-funded plans, or self-insured plans, an insurance company provides administrative services. Like with level-funded plans, there is a fixed cost for administrative fees. But unlike level-funded plans, employers assume all the costs and financial risks in a self-funded plan. They pay for employee health claims from a bank account or trust fund set up for that purpose.

These plans have the highest amount of risk; however, employers can have stop-loss insurance that reimburses them for claims that exceed a predetermined level. There are two types of stop-loss insurance:

  • Specific stop-loss coverage, or individual stop-loss coverage, provides protection for employers against a high claim for any one employee. For example, if employers want a maximum liability of $150,000 per person, and an employee makes $200,000 in medical claims, specific stop-loss reimburses the employer for the $50,000 in excess claims.
  • Aggregate stop-loss coverage provides a set coverage ceiling on the amount of eligible expenses employers pay during that contract period. In other words, this is the coverage for all the employees total, not just for any one specific employee.

While self-funded plans can be expensive without stop-loss coverage, many employers find self-funded plans attractive. If they don’t need to pay fixed monthly premiums and they want to proactively manage claims costs with a hands-on approach, such as steering employees to high-value, low-cost providers and taking advantage of clinical wellness programs, self-funding may be a good fit.

One size doesn’t fit all

What’s right for one company may not be right for you. There are many different health insurance plans and different plan options, and taking a route doesn’t mean you take the route alone. Many advisors are well-educated in level-funding and self-funding.

Start a conversation with your broker to find out if this is in their area of specialty. Whether it is or not, do your research so you can fully participate in the conversations to determine what is the best for you and your employees.

 

 

Content provided by Q4iNetwork and partners

Photo by bowie15

By Sonus Benefits,

Employee Benefits: Planning Ahead

In the past year, employers have had to make significant adjustments to their benefits packages to cope with the pandemic. Most significantly, employers with less than 500 employees have had to adopt new paid leave policies to help employees combat COVID-19 and new childcare demands, with 44% planning on expanding their paid leave benefits in 2021.

But that isn’t the only thing that’s changed. As employers look ahead to upcoming open enrollment and prepare for the year ahead, there are a few things to keep in mind.

1. Virtual enrollment

Since in-person meetings are sharply declining for safety concerns, employers are shifting the yearly in-person meeting with their broker to virtual walk-throughs over the phone, or doing it themselves online. But it’s more important than ever that employers get the most help they can when it comes to their employee benefits plans.

The changing needs of the workforce, the blowback from delayed elective surgeries, and new regulations mean there’ a lot employers have to navigate if they want to see solid ROI on their benefits packages.

To best prepare your business for the upcoming virtual enrollment period, start by checking off this list:

  • Do some preliminary research and see what’s out there. Get a feel for what other employers of a similar size and industry are doing.
  • Ask your employees what they need the most. Create a tiered list of benefits they express a need for, and benefits they would appreciate, but don’t require.
  • Create a detailed list of questions.
  • Call your broker with your questions and the information you gathered and walk through what’s available to you, making sure to take note of everything.

Research preparation will help you cover all the bases and avoid any gaps or lost opportunities. Make sure you give yourself enough time to do sufficient research and get answers to your questions.

2. Shifting the basics

As you plan for the year to come, take stock of all the changes your organization has gone through in the last months. Have you gone partially or fully remote? Are you considering offering remote positions at your company moving forward? Do you have young parents on your team who are juggling new childcare challenges?

Your benefits strategy may very likely need to be updated to meet the challenges relevant to your employees today. To attract, retain, and engage talent, it’s essential you understand their needs and offer resources for them to maintain a healthy life, both physically and mentally.

And that looks different for remote employees, parents with children at home, and employees suffering from increased strain on their mental health due to the isolation and anxiety caused by the pandemic. The basics of employee benefit packages need to shift around these new and different challenges to adjust appropriately.

3. Benefits communication

With the vast majority of organizations still working remote and expecting to continue doing so into the year to come, employers must create a solid virtual communication strategy around their employee benefits.

Depending on the technical skill level and abilities of your employees, you may want to offer varying types of education and support around how to use their benefits. Especially with heightened awareness around healthcare, employees may be more anxious to learn everything they can about their benefits to help ease some of their anxiety.

4. Planning for changing costs

With so much up in the air, leaders in healthcare are warning that cost projections for next year are cloudy at best. Increased demand for mental health services, the blowback from delayed elective surgeries, and potential vaccine costs are making it difficult for employers to prepare financially for the unknowns. To help with this, talk with your employees about what services they expect to need. Work with your broker to define a strategy that works best for your business.

Stay tuned

As circumstances change, be sure to keep a finger on the pulse of the insurance industry. Keep tabs on how your employees are feeling and what their concerns are moving forward. Although this can feel overwhelming, remember that there are many resources available to you to help guide you through the confusion and change.

Work closely with your broker and expect them to provide you with objective, informative information. Your broker should be your right-hand man during the next few months, and if they aren’t preparing you with strategies, education, and support, you may need to look elsewhere. As you move through the upcoming six months, stay informed, in touch, and open to new solutions and ideas, and you will come out the other side successfully.

 

Photo by mizar_21984

Content provided by Q4iNetwork and partners

By Sonus Benefits,

Employers, It’s Time to Talk About Telehealth

It’s been a hard year. For businesses, families, individuals, the economy, Australia—basically everyone but our pets. The strain on our collective psyche has worried healthcare professionals who are struggling to adapt to increased demand while trying to deal with disrupted delivery of their services caused by the pandemic.

In late July, the Center for Disease Control released a report that showed 40% of adults reporting they were struggling with increased mental health difficulties and substance abuse coping due to the pandemic.

The world of healthcare has seen a massive shift towards virtual healthcare or telehealth services in recent months. A study from the NYU Grossman School of Medicine found that NYU Langone Health experienced a 683% increase in urgent virtual care visits and a staggering 4,345% increase in non-urgent virtual doctor visits.

What does this mean for employers?

While employers have slowly been integrating teleservices into their benefits packages for some time, they may not have seen much enthusiasm towards the services until now. And that increase isn’t expected to go away. It’s projected that the telehealth industry will see a compound annual growth rate of nearly 40% over the next five years.

So, what exactly does that mean for employers? That it’s well past time to ensure they are offering telehealth services to their employees, not just as a quick fix, but as a long-term solution. Because of the pandemic, most providers have successfully made the switch to offering virtual care, allowing those already with insurance to stick to what’s available to them.

But that may not be enough. Employers must make telehealth services available to their employees—not just in the form of physical wellness, but behavioral and mental health.

As the effects of the pandemic continue to wear on individuals and families, it will be increasingly less likely that organizations will avoid seeing these effects in their employees. They must take steps now to help prevent further harmful effects from manifesting in their employees by creating systems that can successfully address these issues as they arise.

Where to go, and who to ask

There’s a lot of information about different services and how they’ve made a difference for employers. To get a handle on all of it, take these steps:

  • First, do your research. Ask your broker about telehealth services you can provide and read up on them.
  • Survey your employees. Find out what they want and need.
  • Create an implementation plan. Educate your employees, not just once, or in one way. Some of your employees may not be as comfortable adapting to new technology as others, so make sure you provide ample training and assistance to use it successfully.

Going forward

Like any new system, benefit, or practice you introduce to your employees, it’s critical you don’t just set it up and forget about it. Monitor the program closely and follow up with your employees to find out what’s working and what isn’t. Identify areas that can be improved and locate issues to address.

Now is not the time to be haphazard about your process. While the pandemic may make telehealth services easier to implement in some ways, remember that it is an attempt to address a critical issue that can quite literally mean life or death depending on its success or failure.

In the end, the best thing that employers, leaders, organizers, and advocates can do is work together to provide the best quality care to the largest number of people. Make sure you’re doing your part to support your employees and set them (and your business) up for success.

 

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Content provided by Q4iNetwork and partners

By Sonus Benefits,

Healthcare predictions: What’s in Store for This Year and Beyond?

Guest blog content provided to Q4iNetwork consultants by freshbenies freshbenies-Logo-CMYK 2018

Love it or hate it, healthcare changes over time— as do the consequences for employers, employees, providers, and patients.

Each year, freshbenies attends dozens of conferences, speaks with thousands of benefits consultants, and reads hundreds of thousands of words about this industry. After all, we’re in this thing together.

Based on what we’ve learned, here are ten predictions for the coming year.

1. Costs will rise. Again.

This seems so obvious to those of us within the industry. So why even list it? Let alone as number one? Because it can’t be ignored, and it continues to rise. Last year, the annual healthcare costs for a family of four were over $28,000. Bottom line: families will continue to carry higher portions of healthcare increases, and it shouldn’t be overlooked or forgotten.

2. Low unemployment will drive creativity.

While rate increases are a constant, the biggest shift this year is to a 3.7% unemployment rate. Fear of loss is always a better motivator than the desire for gain. A tight labor market will drive employers to try innovative solutions more readily. This includes creative benefit plan designs, perk programs and programs for non-benefitted employees.

3. Innovative benefit plans will gain momentum. 

The pendulum will begin to swing toward less traditional plans, including:

  • Value-Based Insurance Design (VBID)
  • Reference-based pricing models
  • Association health plans
  • Captive medical plans 
  • Direct Primary Care (DPC) 
  • High-performance centers of excellence

When suggested in the recent past, many companies have declined to install these ideas amid complaints of complexity, employee confusion or skepticism of savings. But given the low unemployment rate and the fact that consultants are getting better at explaining these solutions and pulling them together – these types of benefit plans will increase. 

4. Perks will pop.

Perks will continue to gain interest and traction. Services like gym memberships, healthcare navigation experts, telehealth, consumerism savings networks, pet care, identity theft protection, flexible hours, remote work, student loan repayment, car wash services, free snack programs, etc. are often the things people list when they brag about their workplace culture. They’ve become differentiators even among the big expense of health insurance. An employer can lose an employee to another company from the draw of perks that scratch an itch employees didn’t even know they had.

5. “Caring” support for workers will grow.

Every employer says they care about their people. But how do they actively show it? Smart employers are getting significant PR power by touting two specific sets of services…

  • Behavioral Health – The US Department of Health & Human Services estimates that 96.5M Americans live in areas with shortages of mental health providers. Effective tools that offer video visits with counselors and psychiatrists or even text-based guidance with specialists provide employees with new methods of care.
  • Caregiver Support – It’s estimated that 1 in 5 employees care for an adult family member or friend. This significantly affects an employee’s work life by adding stress and taking 15 to 20 hours of their time each week. New solutions are capturing employer interests, such as services that pair employees with a licensed coach whose expertise best matches their specific caregiving situation, as well as secure portals for documentation and collaboration. These benefits bring much-needed help, increase productivity and build tremendous loyalty. 

6. Engagement will drive more decisions. 

Continued rate increases coupled with poorly-implemented cost containment tools will draw employers to focus on achieving employee engagement. Stats revealing low utilization will bring cancelation of past programs. A shift will take place from checking the box of offering a service to moving the needle on ROI via higher utilization. 

Employers will be driving employees to programs that:

  • reduce in-patient, urgent care or emergency room visits
  • include Remote Patient Monitoring (RPM), Centers of Excellence, and wearables
  • help employees effectively navigate the healthcare system, from selecting top-tier physicians, and providing price transparency to medical bill review and negotiation

7. AI growth will not be artificial.

Artificial Intelligence and machine learning in the healthcare app space will surpass $1.7 billion this year, while health data analytics will reach $68 billion. The strongest advancements will be with machine learning in diagnostic imaging, drug research, and risk analytics. On the benefits side, we’ll see AI functions being touted throughout websites and apps.

8. Little help will come from DC (Republicans)

With a divided Congress, we can’t expect significant changes in federal health laws over the next couple years. Rather, most changes to the “flavor” of ACA will come from the thousands of issues inside the law that were at the discretion of the various departments like Health & Human Services. 

Hopefully, we’ll see bipartisan agreement with updates to Health Savings Account (HSA) laws. What’s controversial about that, right? Right. Be hopeful, but don’t hold your breath.

9. Lots of single-payer talk will come from DC (Democrats)

Remember when Republicans had one consistent chant of “repeal and replace?” Turns out it was a great slogan, but there was no actual plan to implement it. That’s exactly what “single-payer” is among Democrats this year. 

Lawmakers have many different ideas about what these two words mean, but that won’t slow them down. Single-payer was one of the top subjects during the 2018 mid-term elections and it will gain traction throughout 2019, right into the 2020 election. But it’s unlikely that a workable plan will be developed.

10. True employee benefit consultants will be in demand.

Brokers who aren’t consistently improving their knowledge will fall by the wayside. Consolidation will continue and true consultants will be in demand more than ever before. 

What does this look like? True employee benefits consultants will stop talking about how many decades they’ve been in business and start talking about how they can deliver results to the businesses they help.

They will separate themselves from the broker crowd by coming up with new ideas and new solutions that deliver better healthcare while keeping costs in check.

And when it comes down to it, isn’t that the future we all want to see?

 

Photo credit Andriy Popov 

By Sonus Benefits,

Out of Pocket Costs: 3 Pain Points to Address

Guest blog content provided to Q4iNetwork consultants by freshbenies freshbenies-Logo-CMYK 2018

It’s a sad healthcare reality that more and more Americans are being forced to decide whether they can afford to use their medical plans.

And while great brokers and employers are implementing strategic ideas to contain skyrocketing out of pocket costs, it seems to become even more challenging every year.

Employers are paying more to provide coverage, but employees and their families are also paying more than ever before as out of pocket costs continue to rise.

Here are three key problems associated with rising out of pocket costs that must be addressed by businesses and employee benefits advisors alike.

1. Shrinking coverage and higher costs go hand in hand 

Employers are paying higher prices for plans with shrinking networks and narrowed formularies. These plans are forcing families to shoulder over 40% of medical cost, which averages about $11,500 annually— with $4500 of that being out of pocket spend. This has resulted in an increase of more than $1,000 every year for working families for the last four years running.

How do smaller networks and the rising cost of care play out? Consider this statistic: one-third of patients are referred to specialists each year, and 50% of those referrals are out-of-network.

With those kinds of numbers, it’s easy to see how the pain points of rising premiums, smaller networks and high out of pocket costs quickly collide for employees. 

2. Foregoing care is costly for everyone

High Deductible Health Plans have been associated with a 55% reduction in office visits.

On the front end, HSAs have consistently remained a strong option for lower premiums and tax incentives, driven by the idea that it would empower employees to be better consumers. On the back end, however, we’re seeing that without providing practical transparency tools, education, and direction on how to navigate the cavernous healthcare space, people are tending to just avoid it altogether. Which means they are skipping both inappropriate and appropriate care. 

The great irony is that while the US spends the most on healthcare, we are not among the healthiest populations. Too often, Americans are being forced to decide whether they can afford to use their medical plans.

From missing an early diagnosis for a major medical issue to foregoing care for a respiratory issue that later lands an employee in the ER, these decisions are costly for families— and for employer-provided medical plans as well.

And if that wasn’t enough, people are also skimping on medications due to the rising cost of prescription drugs, which brings us to our third issue.

3. Rx is a BIG contributing factor 

Three in ten Americans (about 32 million people) have been hit with price hikes on drugs they routinely take. Most consumers feel they have little to no options when facing this situation.

This pharmacy out of pocket cost driver cannot be ignored. A few things to consider:

  • Increasing use of specialty drugs will prove to be the fastest growing cost component in any medical plan.
  • Removing medications from medical plans doesn’t remove the need for that prescription.
  • Empowering employees with tools and education can uncover more cost-effective options.

Higher overall medical costs, coupled with soaring out of pocket spend, make it harder to care for your employees and their families. The time to accept this as the norm is over. It’s time to do better by and for everyone.

If you’re working with a forward-thinking employee benefits broker to find creative new ways to address and solve these problems, you’re on your way to being part of the solution.

 

Photo credit vimvertigo 

By Sonus Benefits,

Are You Working With an Insurance Salesperson or a Benefits Consultant? Here’s How to Tell.

Today’s employers are screaming for an increased ROI on their employee benefits. They want an affordable option that takes care of themselves, their families, their employees, and their businesses.

Meanwhile, healthcare costs continue to spiral and the demands on HR have become increasingly complex. This puts employers in a difficult position having to navigate some very complicated and expensive circumstances.

Is it all about cost?

Every business needs to have some degree of control over these critical factors related to benefits and employees.

  • The cost of the benefit/insurance program
  • The time demands of service issues associated with the program
  • Clearly defined goals for the HR/benefit/insurance efforts
  • Their ability to attract/retain the best talent
  • The level of morale and employee engagement in the organization

Historically, insurance brokers have only focused on the first two items: The cost of the program and how it will be serviced.

But as the needs of employers change, so too should the level of discussion and the range of advice your insurance consultant brings to the table.

Sales vs. Consulting

An insurance salesperson will come in talking about two main things:

  • The Product
  • The Price

They may also try to sell you on their great customer service and the power of your relationship with them and their relationship with the carriers. But this is where it ends.

An employee benefits consultant won’t come in talking at all.

And they won’t breeze in with a spreadsheet full of carriers, price points, and policy recommendations. No, a true benefits consultant will come to you with a list of questions.

In order to be able to offer ideas and advice on how to improve your business through a strategic employee benefits strategy, they need to hear from you. What are your most pressing issues? Your pain points? Those things that are not only keeping you up at night, but also keeping your business from getting where you want it to be?

Ye Olde sales pitch

“We have great relationships with the carriers! Let us give you a free insurance quote! We can beat your price!”

“Nobody provides better service than we do! We’ll be like an extension of your HR department!”

“Look at all of the ‘free stuff’ we’ll give you if you become a client!”

If you’re hearing these things, you’re probably working with a salesperson.

A new approach

True benefits consultants are much more interested in helping employers craft strategies for better alignment between HR and company goals.

Yes, they are committed to ensuring their clients have the right insurance solutions at the right price, but they also understand that insurance is just one part of the answer they must bring to their clients. These folks show up with a level of insatiable curiosity focused on uncovering what may be holding your organization back from reaching new heights.

This kind of conversation can cover anything from employee recruitment and onboarding to benefits communication to plan design to compensation structures to wellness programs and more.

The name game

Don’t be fooled by the terminology. Just because a broker refers to himself as a consultant doesn’t mean he is one. And just because a consultant refers to herself as a broker or agent doesn’t mean she’s simply swooping in for the hard sell. You’ll need to make your assessment based on the focus and level of conversation presented to you.

If it’s all about product, carriers, price, and spreadsheets – you’re probably working with a salesperson. Or a glorified distributor of carrier products.

If it’s all about you, your HR and company goals, your employees, your strategy, their process to help you with those things, and a clear distinction between the insurance carrier and their own advising services, you’re talking to a consultant.

Who would you rather work with?

A policy peddler who focuses on one year at a time or a trusted advisor who wants to help you create a long-term strategy for success?

Think about your current insurance agent. Which category does that person fall into? Is it time to take a look at some other options?

It can be daunting to think about breaking ties and starting anew. But it can also be a great opportunity for you to take your benefits, your broker, and your business to a whole new level of performance.

 

Content provided by Q4iNetwork and partners

Photo by  diplomedia

 

By Sonus Benefits,

Why Propose Benefits for the Unbenefited? 3 Reasons

Guest blog content provided to Q4iNetwork consultants by freshbenies freshbenies-Logo-CMYK 2018

What are you doing for employees that don’t qualify for benefits or didn’t elect health insurance coverage?

Although rising health insurance premiums may make this question more challenging for employers to answer, it’s also become increasingly important to ask. There are two distinct ways to serve the unbenefited:

  1. Benefits the employer can provide
  2. Benefits the employer can offer

Here are three reasons why you should consider proposing benefits for your unbenefited employees.

1. Unmet needs = opportunity

These two groups of employees represent a severely underserved benefit population: 

  1. Those who aren’t eligible for medical coverage
  2. Those who didn’t elect medical coverage

The latest Milliman study shows costs for healthcare are increasing for employees at an even faster rate than employers. This factors into the number of employees who don’t elect medical coverage. Add to this the 28 million Americans who work part-time and you can see both the need and opportunity for innovative benefits to serve this population.

Here’s a recent example:

A new broker asked me for a proposal for 800 employees. After we discussed the group in more detail, he explained the 800 employees already had medical coverage, but there were over 4,000 employees in the entire group. I asked him, “What about the other 3,200+ employees?” There was silence on the other end of the line. 

Our 71% average utilization rate more than justifies adding freshbenies to employees with existing medical coverage, but there’s arguably even more value created by providing services like freshbenies to ALL employees.  

Plus, with the newest freshbenies membership, employers have scalable options including a stand-alone freshSAVINGS PACK – 9 savings networks for Rx, Dental, Vision, Chiropractic and more. This bundle adds tremendous value to a population of non-benefited employees, plus it can be further customized with optional voluntary Add-Ons.

2. A holistic benefits strategy

Providing benefit solutions for an entire group, not just those with existing medical coverage, is a strategy that both recognizes and leverages the interconnectedness of employee satisfaction.

Let’s take two employees: Jack and Jill. Both are eligible for health benefits. Jack declines coverage while Jill opts for the new high deductible health plan. Both Jack and Jill work equally hard and are equally valuable to their company. Yet, over the course of the next twelve months, Jill’s employer will likely contribute hundreds to thousands of dollars toward her benefits. Meanwhile, they will contribute nothing toward Jack’s. 

Which employee do you think will feel more valued by their company? Which will be less likely to look for another position? Which would readily refer a friend for an open position? Of course, the answer is Jill. But doesn’t Jack deserve some benefit love from his employer, too?

And, there are so many more benefits you can offer. You have the standard worksite benefits like disability, accident, critical illness, long-term care, etc.

There are also perks like Telehealth, pet insurance, identity theft protection, legal savings, other savings networks, student loan repayment, parental leave, tuition reimbursement programs, remote working options, wellness stipends or reimbursements, behavioral health/counseling, volunteer time off, entertainment passes, etc. 

Employers who provide benefits for all their employees, independent from the health plan and eligibility rules, can also expect to benefit through:

3. Better benefits leads to better performance

Putting together a holistic benefit strategy is a win-win scenario. Doing so will allow you to deepen and solidify your relationship with your employees by making sure their pain points are being addressed.

At the same time, you’re also able to differentiate yourself as an employer by providing a comprehensive (and attractive!) benefits packages for current and future employees.

Your employees are the engine that make your business run. Make sure they’re feeling healthy, happy, and valued, and they will take you far.

 

Photo credit andriano