Group Health Insurance: The Definition of Insanity...

Most of you already know that the definition of insanity is repeating the same action over and over again, expecting a different result. For years in healthcare we have repeated the same actions expecting that somehow, we would achieve a different outcome. We all know that hasn’t happened! So as employers (small, medium and large) how can we change the narrative and get back in control of our healthcare spending and not be victims to yet another year of premium increases and/or reduced benefits for our employees?

This means approaching healthcare differently, for some employers a good option would be self-funding their benefit plan. This takes courage, but a self-funded plan managed by a third-party administrator allows the employer to keep the savings generated, instead of the savings/profits going to the insurance carrier’s bottom line. It also puts the employer in the driver seat when it comes to plan design and spending. Moving to a self-funded plan is a long-term commitment. There will be good years and bad years, but the employer can insure against catastrophic losses, and during other years the savings generated will provide employers with the opportunity to reduce employee premiums, enhance benefits or simply apply the savings to other areas of the business.

A self-funded plan allows participants to shop around and find quality providers who price their services below others in the industry. If we start rewarding prudent healthcare spending, rather than blindly assuming and accepting provider networks that are contracted by the insurance carrier; we can begin the process of changing the landscape of healthcare and move away from traditional models that reward quantity over quality.

Let’s say that you are all on board with innovation and change but not quite ready to pull the trigger on a self-funded plan. There could still be room for savings, without slashing benefits. Putting in place a high deductible health plan along with a Section 105 plan. Section 105 of the Internal Revenue Service (IRS) regulations allows for reimbursement of medical expenses under an employer-sponsored health plan. There are various types of Section 105 plans including: Health Reimbursement Arrangements, Medical Expense Reimbursement Plans, Accident and Health Plans, and more. Combining a high deductible health plan with a Section 105 plan can reduce premiums and maintain quality coverage for your employees.

​Making changes that put the employer back in the driver seat, means that we won’t just sit around expecting premium increases year after year.  We all know that a good benefit package attracts and retains talent, thus benefits should be implemented with the goal of improving benefit offerings while controlling and reducing the costs of healthcare.   No more insanity!  That is our battle cry.