August 11, 2015
5 Things Your Company Can Do to Keep 2016 Rates Affordable
When it was announced that group health insurance premiums would be subject to sharp increases in 2016, an average of 20-40% based on industry chatter, it's safe to assume that small business owners from every industry felt a similar sinking feeling of despair in their collective gut. If this is news to you, you can read more about the reasons for coming rate hikes, here. If you are aware of what's on the way, you're likely looking for options to help keep your premiums as affordable as possible, without having to completely compromise the quality of coverage offered to your staff.
Let's review 5 things your company can do, right now, to prepare, manage and survive the coming employee insurance rate increases.
1. Don't Automatically Renew Before Doing Some Research
There was a time when renewing a group health plan was no more complicated than making a call to your agent and reviewing the numbers. Oh, how times have changed. Before you automatically renew your employee health plan, it is extremely advisable to learn how the system and process have changed, and how these changes impact you. Get new rates in writing, ask about hospital networks, copays, deductibles and other changes that will affect your staff.
2. Schedule a Benchmark Review of Your Current Employee Healthcare Plan
An annual benchmark review allows you to compare the coverage you're offering, against what others in your industry and geographic area are offering. It also allows you to see where you might be providing excess or insufficient benefits, while presenting options for reducing expense and eliminating redundant coverage. This is an essential starting point in keeping group premiums affordable.
3. Consider an Alternative-funded Group Health Plan Option
Unlike traditional group health plans which automatically determine premiums based on community ratings, going with an alternative-funded plan allows you to structure benefits that specifically address your needs and budget, while paying only for those who are using benefits. These plans follow the 80/20 rule; whereas 80% of benefit expenses typically come from 20% of those utilizing them.
4. Set Up a Defined-Contribution Plan or Private In-house Exchange
Functioning as a private exchange, defined contribution plans can help businesses avoid steep premium increases while still offering generous health benefits. By establishing a private health insurance exchange and designating a monthly contribution amount of your choosing, you can better manage your employee healthcare dollars, while giving your staff the freedom to choose from a diverse selection of plan options.
5. Get a Second Opinion from an Agent Who Knows Healthcare Reform
We understand that business/broker loyalty is a powerful concept, but if your agent is not working adamantly to help you prepare for the coming increases, you need to talk to a new broker. Loyalty is inconsequential if you're forced to close shop due to unaffordable rate hikes. Find an agency that specializes in healthcare reform for business, and explore all of the options available to you.
If you're a business owner or know one who is worried about the 2016 group health rate hikes, Premier can help. We were among the first agencies in Illinois to proactively offer combination and alternative-funding health plans, including defined contribution, level-funded plans, HRA, HSA and many more. Call us today at 800-369-0287 to schedule a free, no-obligation meeting with one of our agents, or write to us in confidence through our website contact page.