Companies in the Large Group Market (500+ employees) have leverage and scale that is not available to many of your competitors. Unfortunately, you’re also faced with a difficult paradigm when choosing a broker or consultant. The well-funded national firms you’re considering all sound impressive but year after year your health insurance costs continue to increase, even if it outperforms your consultants so called “trend.” We’ll tell you how to avoid common mistakes, provide an overview of your options, and show you how BenefitU can help your company.
The Definition of Insanity
It’s several months before your next health insurance renewal and you’re thinking about talking to the other regional & national brokers to see if any of them can help you reign in a top three expense that continues to increase year over year.
Your team works spends precious time compiling all of the relevant information as additional requests filter in and the clock ticks down to your renewal date. Shortly thereafter you endure hours and hours of finalist presentations with beautifully bound booklets, impressive benchmarking graphs, and a list of the services available from the firms vying for your business.
If that’s not enough to force a change they will send in their “Closing Team” made up of credentialed subject matter experts from compliance to underwriters who you will rarely, if ever, see should you select their firm. You may make a change and the first year may seem like things are improving but soon after you’ll be back to the drawing board because your costs are still increasing at an unsustainable rate.
Insurance Isn’t Rocket Science
What broker consultants keep secret is that if you provide 10 firms with the same data and ask them to obtain proposals from the market, all 10 will return with the exact same proposals. There’s no difference between the multinational, publicly traded brokerage and your neighbor’s cousin who works out of his house.
Enrollment kits, subject matter experts, on staff legal counsel, underwriters, compliance, wellness program, data analytics, and all of the other magic fairy dust you’ve been presented have led to two things: Increased stock prices for the consulting firms and increased premiums for you and your employees.
The Game is Rigged
Health insurance companies, their subsidiaries and their third party administrators directly benefit when insurance premiums increase. You may think that by changing carriers or funding mechanisms, you can solve the problem. This allows you increased transparency into your claim data but doesn’t change the ecosystem has driven the cost of claims up year after year after year.
Have you secured your pharmacy rebates? Great! Guess what happens now: Your Pharmacy Benefit Manager is reclassifying their kickback compensation as marketing or distribution fees. Even though you may be able to carve out your Pharmacy Benefit Manager with your current administrator, it will come with a hefty setup fee and ongoing “integration costs.”
UNDERSTANDING YOUR OPTIONS
Stop Pulling Your Hair Out & Change Your Buying Strategy
To put it bluntly, Insurance is a commodity. The plans and pricing are the same regardless of who represents your organization. Sending multiple brokers to quote your benefits each year creates an environment where brokers spend the majority of their time focused on how to beat their competition and not on what is best for you and your organization.
Interview brokers & consultants outside of your annual renewal period and ask them the following questions:
- Why do our costs increase continually?
- How can you decrease those costs or improve the benefits?
- Can we speak to other employers who have experienced those results?
Once you’ve conducted these interviews that have focused strictly on strategy, select one firm to represent your organization. Any broker who offers to quote your benefits without having you as a client should raise suspicion. If you choose them this year, next year they’ll be out there offering to work for free for even more non-clients which takes away from time spent working on behalf of your company.
Too Many Cooks in the Kitchen Spoils the Broth. This is true for insurance as well. Choose a broker partner and let only that broker present your business to the market.
What You Don’t Know Can Hurt You – Understand the Markets
Many insurance brokers would prefer that employers see their employee benefits as an enigma and not truly a controllable expense. If that were the case the barrier to become an insurance broker would be far higher than a one-week course that you can take online.
As an employer you should demand a baseline understanding of the pro’s and con’s of the various markets available to you for purchasing health insurance. Since all of the markets are the same regardless of the broker, you should be focusing on finding a firm who can take you from the market you are currently in to the markets that you want to access that you probably don’t even know about.
You would be shocked how many of our new clients are able to generate significant savings simply by looking at a market they’ve been able to access for years that their previous broker overlooked or simply refused to evaluate.
HOW BENEFITU CAN HELP
Healthcare and health insurance are notoriously vague in their pricing. You deserve to know who is being paid, how much they are being paid, and what services are being rendered. We apply transparency to everything that we do, and you will know exactly what our firm is being compensated. You may think you know your broker’s compensation today but there are numerous bonuses, overrides, and contingency programs that are not reportable on the Form 5500.
Transitioning Your Health Plan
Health insurance is fundamentally broken and the only way to bring predictability and stability to this top three business expense is to work with a partner who understands the business models of all parties to your health insurance.
By developing a risk profile specifically for your organization, we leverage existing and emerging markets to build a benefit program that eliminates high profit margins and waste currently being retained by insurance carriers, pharmacy benefit managers, third party administrators, and other parties to your current health insurance program.
You wouldn’t be reading this if you weren’t frustrated with your employee benefits program. We wouldn’t be here if we weren’t equally frustrated with an industry that consistently spikes the ball when beating “trend” that the industry itself developed! By taking 30 minutes and providing 5 data points we can tell you more about your benefits expense than all beautifully bound benchmarking reports consultants have slid across your desk for years.