The fully insured health plan model hasn’t been working very well for employers or employees. Premiums keep going up, but benefits stay the same. Carriers have the data to help reduce employers costs — they just don’t have the incentive.
Fed-up employers are starting to see the benefits of self-funding an insurance plan for their workers. More and more employees, even those who work at small firms, are being covered by a self-funded plan — from 61% of all covered workers in 2019, according to Kaiser Family Foundation, to 67% last year — even with the myths and misconceptions that might scare them away. Each employer has to weigh the decision to self-fund a healthcare plan for themselves, but what they think they know is likely wrong.
Alternative Reimbursement: You Can’t Pay Less For Healthcare Unless You Pay Less For Healthcare
Thursday, June 10, 2021, 2:00 PM ET / 11:00 AM ET
The only way to pay LESS for healthcare is to pay LESS for healthcare. This simple statement sounds obvious but is ignored by most employers as reflected in their health benefits. For years, we have depended on the carriers to negotiate the price we pay for healthcare, having a more direct and transparent reimbursement (provider compensation model) is the key to immediately lowering your health benefits cost.
In a post-COVID world, even zero change in employees’ healthcare costs will likely still result in them spending a greater percentage of their income on healthcare. Why? Most household incomes are down so the focus shouldn’t be on maintaining the status quo, but on fighting to reduce overall costs and expenditures.
Advisors are a critical first step for employers who are ready to take the plunge. They provide the education and the assurance that life can be better Self-funding doesn’t mean employers are alone. Advisors are key team members who bring together vendors, administrators and insurers to build a plan that meets the employers’ needs.
Employers who are ready to take back control of their healthcare spend have an alternative to traditional health plans in self-funding. They just need the courage to take the first step.