Your health plan renewal is rapidly approaching and your organization is facing increased healthcare costs and out of control drug spending. What are your options?
Understanding the financial impact, compliance challenges and new administrative burdens associated with the ACA Employer Mandate is just the first step in this process of managing compliance and employee benefits.
As an employer, once you have identified your exposure, and implemented a strategy and system to manage the compliance and IRS reporting requirements, the next step is to do a comprehensive analysis of your current healthcare plan to maximize savings.
Escalating healthcare costs have made it increasingly difficult for employers to provide health insurance benefits to their employees at reasonable premiums.
Some have responded by reducing benefits or regularly changing carriers based upon the lowest price at the time. While this may be helpful for short-term budgeting, the problem is often more confusion than its worth.
What is even more problematic is the fact that most fully-insured employers never know their true cost of insurance.
Therefore, if they have not done so already, organizations over 50 employees should consider a self-funded approach.
The Advantages of Self-funding
When properly designed, there are several ways an employer can “win” under self-funded arrangements. Examples of why include: eliminating community rating, avoiding essential health benefit mandates required by the ACA and perhaps most importantly, the avoidance of adverse selection in the fully-insured marketplace. Other examples include:
- Reduced fixed costs – A Third Party Administrator will process claims and administer plan with less overhead expense than an insurance carrier.
- Low Claims Utilization – Most full-insured group plans have no provision for refunding overpayment of premium, efficient coordination or subrogation of benefits.
- Reduced Premium Taxes Under ACA – Self-funded plans enjoy substantially lower taxes than fully insured plans under the ACA
- Interest and Reserves – Organizations who self fund retain the claim reserves traditionally held by insurance companies.
Utilizing the Right TPA
Most employers do not have the resources to handle the daily operation of a health benefit plan so they purchase administrative services from a TPA. The role of a TPA role includes development of necessary documentation, management and adjudication of claims, claims reports, COBRA administration and much more.
Are you finding this difficult to find? Having examined dozens of TPA’s nationwide, none of them lived up to our standard of excellence, so we decided to create our own.
E.D. Bellis is excited to announce our self-funded administrative services division dedicated solely to the administration of self-funded employee benefit plans.
Do not delay as finding savings in your health benefit plan does not happen overnight. Our consultants can help you find these savings and while this approach is not right for everyone, we have found savings in administrative services to be up to 30 percent which can equate to millions in savings and our Pharmacy program will ensure additional savings through drug rebate programs.
For more information or a free consultation to see if these strategies make sense for your organization contact Sean McGuire at 1-844-626-7202.