5 things employers should consider when changing health plans

Buying or changing health insurance plans is an important decision. With so many products and services on the market, it can be difficult to consider what benefits and services employees want along with the best care options available at different price levels. When researching health insurance with their benefits counselors, employers should take into account these five main considerations: cost, innovation, affordability, access, and contributory strategy.

Cost is important, but it doesn’t tell the whole story. Too often, the summary analysis of a renewal policy focuses on the net cash impact before and after changes to the proposed benefit plan design. There may also be a discussion of the experience from the previous period to identify why expectations for claims costs next year are higher and why a rate adjustment (or plan adjustment) is needed. However, just looking at the numbers ignores a huge amount of improvements and innovations that have emerged over the past five years that can have a major impact on your bottom line.

Beyond cost is the broader consideration of the investment of each health plan and the implementation of value-added services considered for the respective renewal and improvement of care management skills at the member level. These capabilities and initiatives should help control costs by proactively identifying and managing potentially avoidable events and / or potentially avoidable health complications. Also, the halo effect of (minor) improvement in absenteeism and high productivity are as important as cash outlays.

Accessibility is also important. Recruiting and retaining employees means having competitive medical advantages. The trend over the past 20 years has been more relative to the increase in deductibles and copays and the shift in the burden on the employee who likely only experienced a modest increase in income during the same period. If employees cannot afford to use the health benefits plan, it has no value and no impact on their retention. Switching to self-financing can save expenses for employer benefits, but often has little or no impact on the employee. Likewise, direct procurement strategies may seem beneficial for accessing primary care, but leave employees at risk of large demands for money. The same global consideration related to the use of technology and innovation for administration efficiency and proactive care coordination can also lead to the design of alternative plans and pricing considerations that increase employee engagement and satisfaction by reducing costs.

Don’t try to save money on gatekeeper floor plans. Limiting access to care is not an effective cost management strategy. Some benefit plans require a primary care physician (PCP) or require pre-authorization to see a specialist. Refusal of care and restrictions on access to care have been shown to increase the frustration of providers and members and have minimal impact on cost management. Instead, look for a health plan with increased use of technology that improves access to care and, more importantly, access to a wide range of professionals who maintain quality of care, increase convenience, and improve satisfaction.

A plan design that incorporates telemedicine options for employees will outperform care management performance and be more involved than a design that incorporates telemedicine, with separate branding and mandatory copays. A diverse group of professionals should be part of the telemedicine platform. Look for planning assistance, as well as pricing transparency and data portability features. A telemedicine network with access to specialists such as cardiologists, psychologists and oncologists in addition to primary care, physiotherapy and nutritionists will be more valuable to employees and have a greater impact in lowering the overall plan costs. This is particularly relevant in addressing the underdiagnosis and undertreatment of mental problems. A diagnosis of a life-threatening condition or chronic illness can be accompanied by stress, anxiety, and even depression, all of which lead to higher complications and medical costs.

The employer’s contribution strategy is an important consideration. A common yardstick for employer cost-sharing has typically been 70% of the employer and 30% of the employee. Budget pressures over the past decade have led to alternative projects, including defined contribution strategies and subsidized tiers. A defined contribution strategy, in which a fixed dollar amount is set, will limit the employer’s share of the cost of health insurance, but will also produce extreme increases in employee share if the benefit plan rates are increased . Consider a monthly single employee bonus of $ 550, with a defined contribution of $ 400. A 10% increase in the rate to $ 605 results in a 37% increase for the employee ($ 150 increases to $ 205). Rising costs of retirement plans versus single-digit salary increases will have a greater negative impact on lower-paid employees. Similarly, subsidized tiers, where the employer chooses a certain tier and sets their own contribution to that cost, penalizes higher cost tiers (because family coverage is a multiple of employee-only coverage) or results in unexpected income (which is not as valued as salary and therefore has less value for employees).

The goal with the contribution strategy should be aligned with the intent of managing the costs of the plan from a clinical perspective, versus a budget perspective. Which strategy will work best for an employer will depend on many factors unique to that employer, but maximizing plan participation and inclusion in an innovative health plan will capture greater impact and therefore greater savings. Since the contribution strategy has a direct impact on accessibility, enrollment and satisfaction, it will also have an impact on retention and recruitment.

There are many things to take into consideration when evaluating the best health insurance plans for a company. Choosing a cheaper plan seems like the obvious choice, but instead of focusing solely on the price, it’s important to look at the bigger picture. With the help of your benefits advisor, consider the innovation, affordability, access, and contributory strategy of each plan, all of which have a direct impact on costs. Examining all of the underlying factors that affect pricing will help employers choose a comprehensive health insurance plan that offers employees valuable care options that benefit both employers and employees.

Chris Gay is the CEO and co-founder of Evry Health.