As the costs of healthcare benefits continue to rise, a myriad of strategies can help companies reduce or stabilize them.
By George N. Saliba, Contributing Writer on April 7, 2022
While employers can share the burden of chronically rising health care costs with their workers via increased premium contributions and higher deductibles and/or wage copayments, additional cost-cutting considerations exist. . It’s all in a larger land landscape in which the New Jersey Business & Industry Association (NJBIA) 2022 Business Outlook Survey found that 77% of employers expect their health benefit costs to increase in 2022. Additionally, 20% of respondents expect their health benefits 2022 comesh increase of 11% or more.
Employers’ cost-cutting strategies can include choosing carefully between fully insured or self-funded health plans overall and, separately, evaluating options for health care provider networks and benefit plans. ‘Health Insurance.n drawings.
Health Savings Accounts (HSAs) and Health Reimbursement Arrangements (HRAs) can also generate savings, as can other avenues including, but not limited to, pharmacy strategies, telemedecine and wellness programs.
Qualified health insurance bRokers can guide small businesses in choosing healthcare plans, although they may not always listen to MEWAs (multiple employer welfare schemes) such as the Association Member Trust (AMT) based in Short Hills, a not-for-profit healthcare trust that brings together employers, quotes age-based rates for employees at certain companies, and then uses New Jersey’s Horizon Blue Cross Blue Shield for medical claims processing and loss protection. Employees can receive help with medical claims either from Horizon or AMT.
AMT is offered to NJBIA member companies, and according to Harvey I. Mishkin, AMT’s chief operating officer, given AMT’s desire to reduce expenses, “our plan, in an apples-to-apples comparison , should cost less [than purchasing a plan from a carrier].”
While Mishkin points out that every company’s scenario is different, he adds, “How much [are the savings]? It may vary. It can be low, at 3% or 4%, or it can be 10% or 12%. »
As its own entity, Horizon has a wide variety of plans ooptions. These include Horizon Level Select plans, which are tier-funded products for smaller employers that can yield lower costs, increased plan design options, and the ability to carve out certain state-mandated benefits. because the programs are self-contained.-funded, according to Michael J. Considine of Horizon, Vice President for Individuals, Small group and medium-sized markets. Horizon Level Select plans also offer stable monthly billing as well as opportunities to receive account refunds if groups haveanticipated costs.
Stephanie Colonna-Romano, chief operating officer at Cranbury-based Martin Insurance Group, paints a picture of the global variety of healthcare plans. She explains that a tendency in the small group to select products financed by level considered less risky than traditionally self-funded plans has been on the rise for several years.
By and large, with self-funded plans, employers assume direct liability on a pay-as-you-go basis for their employees’ medical claims, while with plans, employers make fixed monthly payments to an insurer who maintains a claims reserve account; if claims are lower than expected, the insurer may reimburse the employer for excess claim payments.
Colonna-Romano said level-funded plans are “not for everyone”do” because they have a medical underwriting component, which is different from the Affordable Care Act guaranteed-issue market.
In addition, Considine d’Horizon states: “We believe that we offer the best quotes for our ACA product for small employers.s and Horizon Level Select, so employers can make the best decisions, based on their situation and goals.
Plan Design / Networks
Colonna-Romano cites plan design and healthcare provider networks as two variables for seeking health benefitst savings
in the fully insured small group market. With plan design, lower-cost health plans may have less upfront coverage, franchises and no more reimbursable fees, but they can be combined with tax-efficient vehicles such as health savings accounts (HSA) and Health Reimbursement Arrangements (HRA).
“These kinds of wetsuits can help save money,” Colonna-Romano points out. Highlights the value of proven HSAs that save employees pre-tax money to pay for medical expensesnses.
However, she adds:[While high deductible plans] work great on paper – and you can show the financial model – it’s hard for [employees] to figure out how much things are going to cost when they use this coverage. [People say]: ‘Now I have thiIt’s a big deductible, and I don’t know what the doctor’s visits and my prescriptions will cost.
While transparency is improving, Colonna-Romano says it’s “still a little murky for a user, especially when you’re in the middle of a health situation and you’reWe’re probably a little nervous.
Leverage Supplier Networks
Colonna-Romano says there has been a trend toward tiered healthcare provider networks and/or different innovative structures that consider both physicians and geography. She said, “You may be able to save some money by looking at something like Horizon’s OMNIA products, where they have a tier structure based on the different vendor types. The OMNIA portfolio utilizes a network of hospitals and providers as part of a holistic, value-based approach to care that usess, according to Considine of Horizon.
Wellness programs and telemedicine
Wellness programs can also play a role in reducing health care costs. Colonna-Romano says that for tier-funded plans, where premium increases are based on experiences of groups of employees, employers can monitor certain claims trends and then address them through wellness programs (they can also promote lower-cost telemedicine care where appropriate).
On the other hand, wellness programs may produce fewer direct effectsbenefits for fully insured plans.
“If you are in a fully insured environment and [have fewer than] 50 [employees], your premium expenses are not specifically tied to your claims,” Colonna-Romano points out. “[Therefore]his [difficult] to draw this ROI calculationtion for an employer [with a wellness program]. [In those cases]normally you can look at productivity, absenteeism and presenteeism to try to derive [ROI]. For some types of businesses, [wellness programs] could also affect workers’ compensationon savings if they have safety and welfare concerns.
Horizon’s Considine touts the HorizonbFit program, which offers all Horizon members access to discounted gym memberships, as well as virtual health and wellness seminars, includingal nurse cats – all for wellness and a healthy lifestyle/lifestyle.
Prescription drug costs also continue to challenge companies, with AmeriHealth New Jersey Senior Medical Director Dr. Frank Urbano, MD, MBA, FACP, saying, “Drug price continues to be a major driver of healthcare costs. We must ensure that health care premium dollars are spent on safe care, efficient and proper care whenever medications are prescribed, which means identifying medications at lower cost, equieffective alternatives. Many physicians have tools that help them easily access information about how much a member should pay for a drug based on their specific health plan. The tools can also offer information on less expensive alternatives when available for more expensive drugs, saving their practices time and effort. »
Horizon’s Considine touts the online Rx Savings Solutions tool that allows members to receive alerts on how to locate and refill prescription medications affordably, with ConsidinAdding that those enrolled in the program saved an average of $439 annually on reimbursable prescriptions. PillPack by Amazon Pharmacy can also provide Horizon members with inexpensive and convenient prescription medications.
Within the exin the extraordinarily complex world of high healthcare costs, businesses have a range of options to reduce them. Colonna-Romano concludes, “The pandemic has obviously resulted in a lot of medical bills, so insurance rates are adjusting accordingly, whether it’s the cost treatment, trial or vaccines. All of this has created serious cost implications for carriers. We’re going to feel the adjustment of that throughout this year.
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