Out of Pocket Costs: 3 Pain Points to Address

Guest blog content provided to Q4iNetwork consultants by freshbenies freshbenies-Logo-CMYK 2018

It’s a sad healthcare reality that more and more Americans are being forced to decide whether they can afford to use their medical plans.

And while great brokers and employers are implementing strategic ideas to contain skyrocketing out of pocket costs, it seems to become even more challenging every year.

Employers are paying more to provide coverage, but employees and their families are also paying more than ever before as out of pocket costs continue to rise.

Here are three key problems associated with rising out of pocket costs that must be addressed by businesses and employee benefits advisors alike.

1. Shrinking coverage and higher costs go hand in hand 

Employers are paying higher prices for plans with shrinking networks and narrowed formularies. These plans are forcing families to shoulder over 40% of medical cost, which averages about $11,500 annually— with $4500 of that being out of pocket spend. This has resulted in an increase of more than $1,000 every year for working families for the last four years running.

How do smaller networks and the rising cost of care play out? Consider this statistic: one-third of patients are referred to specialists each year, and 50% of those referrals are out-of-network.

With those kinds of numbers, it’s easy to see how the pain points of rising premiums, smaller networks and high out of pocket costs quickly collide for employees. 

2. Foregoing care is costly for everyone

High Deductible Health Plans have been associated with a 55% reduction in office visits.

On the front end, HSAs have consistently remained a strong option for lower premiums and tax incentives, driven by the idea that it would empower employees to be better consumers. On the back end, however, we’re seeing that without providing practical transparency tools, education, and direction on how to navigate the cavernous healthcare space, people are tending to just avoid it altogether. Which means they are skipping both inappropriate and appropriate care. 

The great irony is that while the US spends the most on healthcare, we are not among the healthiest populations. Too often, Americans are being forced to decide whether they can afford to use their medical plans.

From missing an early diagnosis for a major medical issue to foregoing care for a respiratory issue that later lands an employee in the ER, these decisions are costly for families— and for employer-provided medical plans as well.

And if that wasn’t enough, people are also skimping on medications due to the rising cost of prescription drugs, which brings us to our third issue.

3. Rx is a BIG contributing factor 

Three in ten Americans (about 32 million people) have been hit with price hikes on drugs they routinely take. Most consumers feel they have little to no options when facing this situation.

This pharmacy out of pocket cost driver cannot be ignored. A few things to consider:

  • Increasing use of specialty drugs will prove to be the fastest growing cost component in any medical plan.
  • Removing medications from medical plans doesn’t remove the need for that prescription.
  • Empowering employees with tools and education can uncover more cost-effective options.

Higher overall medical costs, coupled with soaring out of pocket spend, make it harder to care for your employees and their families. The time to accept this as the norm is over. It’s time to do better by and for everyone.

If you’re working with a forward-thinking employee benefits broker to find creative new ways to address and solve these problems, you’re on your way to being part of the solution.

 

Photo credit vimvertigo 

Are You Working With an Insurance Salesperson or a Benefits Consultant? Here’s How to Tell.

Today’s employers are screaming for an increased ROI on their employee benefits. They want an affordable option that takes care of themselves, their families, their employees, and their businesses.

Meanwhile, healthcare costs continue to spiral and the demands on HR have become increasingly complex. This puts employers in a difficult position having to navigate some very complicated and expensive circumstances.

Is it all about cost?

Every business needs to have some degree of control over these critical factors related to benefits and employees.

  • The cost of the benefit/insurance program
  • The time demands of service issues associated with the program
  • Clearly defined goals for the HR/benefit/insurance efforts
  • Their ability to attract/retain the best talent
  • The level of morale and employee engagement in the organization

Historically, insurance brokers have only focused on the first two items: The cost of the program and how it will be serviced.

But as the needs of employers change, so too should the level of discussion and the range of advice your insurance consultant brings to the table.

Sales vs. Consulting

An insurance salesperson will come in talking about two main things:

  • The Product
  • The Price

They may also try to sell you on their great customer service and the power of your relationship with them and their relationship with the carriers. But this is where it ends. 

An employee benefits consultant won’t come in talking at all.

And they won’t breeze in with a spreadsheet full of carriers, price points, and policy recommendations. No, a true benefits consultant will come to you with a list of questions.

In order to be able to offer ideas and advice on how to improve your business through a strategic employee benefits strategy, they need to hear from you. What are your most pressing issues? Your pain points? Those things that are not only keeping you up at night, but also keeping your business from getting where you want it to be?

Ye Olde sales pitch

“We have great relationships with the carriers! Let us give you a free insurance quote! We can beat your price!”

“Nobody provides better service than we do! We’ll be like an extension of your HR department!”

“Look at all of the ‘free stuff’ we’ll give you if you become a client!”

If you’re hearing these things, you’re probably working with a salesperson.

A new approach

True benefits consultants are much more interested in helping employers craft strategies for better alignment between HR and company goals.

Yes, they are committed to ensuring their clients have the right insurance solutions at the right price, but they also understand that insurance is just one part of the answer they must bring to their clients. These folks show up with a level of insatiable curiosity focused on uncovering what may be holding your organization back from reaching new heights.

This kind of conversation can cover anything from employee recruitment and onboarding to benefits communication to plan design to compensation structures to wellness programs and more.

The name game

Don’t be fooled by the terminology. Just because a broker refers to himself as a consultant doesn’t mean he is one. And just because a consultant refers to herself as a broker or agent doesn’t mean she’s simply swooping in for the hard sell. You’ll need to make your assessment based on the focus and level of conversation presented to you.

If it’s all about product, carriers, price, and spreadsheets – you’re probably working with a salesperson. Or a glorified distributor of carrier products.

If it’s all about you, your HR and company goals, your employees, your strategy, their process to help you with those things, and a clear distinction between the insurance carrier and their own advising services, you’re talking to a consultant.

Who would you rather work with?

A policy peddler who focuses on one year at a time or a trusted advisor who wants to help you create a long-term strategy for success?

Think about your current insurance agent. Which category does that person fall into? Is it time to take a look at some other options?

It can be daunting to think about breaking ties and starting anew. But it can also be a great opportunity for you to take your benefits, your broker, and your business to a whole new level of performance.

 

Photo by  diplomedia

 

Why Propose Benefits for the Unbenefited? 3 Reasons

Guest blog content provided to Q4iNetwork consultants by freshbenies freshbenies-Logo-CMYK 2018

What are you doing for employees that don’t qualify for benefits or didn’t elect health insurance coverage?

Although rising health insurance premiums may make this question more challenging for employers to answer, it’s also become increasingly important to ask. There are two distinct ways to serve the unbenefited:

  1. Benefits the employer can provide
  2. Benefits the employer can offer

Here are three reasons why you should consider proposing benefits for your unbenefited employees.

1. Unmet needs = opportunity

These two groups of employees represent a severely underserved benefit population: 

  1. Those who aren’t eligible for medical coverage
  2. Those who didn’t elect medical coverage

The latest Milliman study shows costs for healthcare are increasing for employees at an even faster rate than employers. This factors into the number of employees who don’t elect medical coverage. Add to this the 28 million Americans who work part-time and you can see both the need and opportunity for innovative benefits to serve this population.

Here’s a recent example:

A new broker asked me for a proposal for 800 employees. After we discussed the group in more detail, he explained the 800 employees already had medical coverage, but there were over 4,000 employees in the entire group. I asked him, “What about the other 3,200+ employees?” There was silence on the other end of the line. 

Our 71% average utilization rate more than justifies adding freshbenies to employees with existing medical coverage, but there’s arguably even more value created by providing services like freshbenies to ALL employees.  

2. A holistic benefits strategy

Providing benefit solutions for an entire group, not just those with existing medical coverage, is a strategy that both recognizes and leverages the interconnectedness of employee satisfaction.

Let’s take two employees: Jack and Jill. Both are eligible for health benefits. Jack declines coverage while Jill opts for the new high deductible health plan. Both Jack and Jill work equally hard and are equally valuable to their company. Yet, over the course of the next twelve months, Jill’s employer will likely contribute hundreds to thousands of dollars toward her benefits. Meanwhile, they will contribute nothing toward Jack’s. 

Which employee do you think will feel more valued by their company? Which will be less likely to look for another position? Which would readily refer a friend for an open position? Of course, the answer is Jill. But doesn’t Jack deserve some benefit love from his employer, too?

And, there are so many more benefits you can offer. You have the standard worksite benefits like disability, accident, critical illness, long-term care, etc.

There are also perks like Telehealth, pet insurance, identity theft protection, legal savings, other savings networks, student loan repayment, parental leave, tuition reimbursement programs, remote working options, wellness stipends or reimbursements, behavioral health/counseling, volunteer time off, entertainment passes, etc. 

Employers who provide benefits for all their employees, independent from the health plan and eligibility rules, can also expect to benefit through:

3. Better benefits leads to better performance

Putting together a holistic benefit strategy is a win-win scenario. Doing so will allow you to deepen and solidify your relationship with your employees by making sure their pain points are being addressed.

At the same time, you’re also able to differentiate yourself as an employer by providing a comprehensive (and attractive!) benefits packages for current and future employees.

Your employees are the engine that make your business run. Make sure they’re feeling healthy, happy, and valued, and they will take you far.

 

Photo credit andriano

5 Pillars of Employee-Related Expenses eBook

Is Your Employee Benefits Broker a Perfect Match?

What’s your relationship like with your employee benefits broker? Are you madly in love with the service you’re getting or merely sticking it out for the sake of your employees?

Are you happy when your insurance agent calls because you know he or she has valuable ideas and insight to help your business? Or do you only hear from that person when he/she needs something from you— like a census, a signature, or a check? 

Is it time to move on?

Maybe you’re having a hard time with the idea of letting this relationship go. After all, your agent is a likable person. You’ve been together a while, and you get along well. Perhaps you don’t see each other very often, so when you do, it’s like connecting with an old friend.

Sure, sometimes it may feel like you’ve been forgotten. Then, just when you think it might be time to move on, your agent delivers a fancy wine and cheese basket, tickets to the big game, or an invitation to lunch.

But is that enough to keep you in it for the long run? Shouldn’t you expect a relationship that’s more fulfilling? A true partnership that addresses all of your business and HR needs?

It’s complicated

Running your organization isn’t getting any easier. And that’s not going to change any time soon. You and your team have serious responsibilities. You need to make critical decisions about your benefit program and strategy, based on your business goals and desired results.

Meanwhile, you’ve got to stay on top of a constantly changing set of industry rules, regulations and compliance issues, and adjust your plans, processes, and operations accordingly. Once you’ve got that nailed down, you have to figure out how to clearly and consistently communicate this information out to your team.

In your spare time, you’re responsible for attracting and retaining employees, keeping them engaged with their work and the company, and dealing with any conflicts and/or issues that come up.

You need a broker who can help ease these pressures, not add to them.

Is this the best you can do?

Deep down, you know you need more. You know you deserve more.

Maybe you’re starting to fantasize about talking to other insurance agents, looking around to see if there’s someone out there who can be the partner to help make all of your responsibilities more manageable.

If this makes you feel a little bit guilty, start thinking about all of the results your current broker swore would be delivered. Did those things actually happen or were they empty promises?

If they did happen, did your work load, your processes, and your business significantly improve?

But they’re all the same! Aren’t they?

Most brokers who come calling will arrive with a very similar list of promises. They say they’ll be proactive, they’ll simplify your processes, and they’ll act like an extension of your HR department.

On the surface, it all sounds great, but soon you find yourself disappointed. Then you find yourself making excuses as to why you shouldn’t look for someone new. You know you’re not thrilled with what you’ve got, but you’re not convinced the ROI is there.

A few common reasons you may be hesitating:

  • The idea of ending relationships and switching brokers stresses you out
  • You’re so busy with the renewal or other things you don’t have time to take it on
  • Deep down, you wonder if a new broker will be any better than your current agent

You’re not alone in your concerns. And many brokers do appear to be the same. Do the following scenarios sound familiar?

A new broker enters the scene:

  • Promising superior customer service
  • Bragging about the relationships they have with carriers
  • Asking for your renewal date so they can give you a quote
  • Talking about the “free” stuff they provide for their clients
  • Showing up with a spreadsheet and a list of all the same old stuff

No wonder you think they’re all alike!

The good news

There are employee benefits consultants out there who are capable of delivering much more than you have come to expect. You just have to find the right match. And once you do, you’ll never want to look back.

The right broker will:

  • Have a significant financial impact on your business
  • Make a measurable operational impact on your business
  • Help you design a long-term, strategic plan for your HR/benefit program
  • Build engagement through enhanced employer/employee relationships, improved processes, and meaningful organizational change

If your agent isn’t doing all of this, it’s time to change things up. Whether you commit to improving your current relationship or starting a new one, you deserve to get the results you need from this important business partnership.

Put yourself out there

Call your broker, and any others you want to consider. Invite them to come in (when it’s not renewal time) and ask them these important questions:

  • How will you help create a long-term strategy for our HR and benefit programs?
  • What kind of operational improvements can you identify and help deliver?
  • What kind of financial improvements can you identify and help deliver?
  • How can you help improve employee relationships and engagement?

If you don’t like the answers you get, swipe left.  

Find the right match

Think of your first meeting like a first date. If a broker comes in making assumptions, telling you what they think you need out of the relationship, and not letting you get a word in edgewise, this person isn’t interested in getting to know you. They’re interested in selling you.

Now, imagine an employee benefits consultant who is genuinely interested in you and your business. One who asks a lot of questions, and then actually listens to what you have to say. A broker who doesn’t expect you to go all in during the first meeting. A benefits consultant who will invest the time and energy it takes to determine how best to reach your goals. A trusted advisor who will provide custom tailored options instead of offering a one-size-fits-all “solution.”

When you find that person, you’ll know. Because letting your old broker go will suddenly seem like the right thing to do. And a whole heck of a lot easier.

 

Photo by akz 

5 Pillars of Employee-Related Expenses eBook