Lowering health insurance costs is easier than you think
Most employers and employees see their health insurance costs go up by 5-10% each year. These increases chew up employee compensation and leave employers scrambling each year to balance their books. However, there are a growing number of employers that disrupting the industry and now they are lowering the costs year over year with little to no impact on employees. But how you might ask?
The problem with the health insurance industry is that it is set up for medical providers, insurance carriers, and brokers/advisors to win and for employees and employers to lose. The first group all make more money when premiums go up and they have built a system for them to win. We at Summit Path Group had this dilemma a few years ago. No matter what we did the costs kept going up, so we went on a five step journey listed below that led us to turning the system around where now costs trend down each year.
So what do you do? Well you can go on your own journey to learn these steps and hopefully you’ll have the same success we did. Or you can benefit from our knowledge and let us share with you the partners that we use and the plan designs that we have already implemented. All you need to do is replicate what we have done to enjoy the same success that we have had. Which has resulted in the employer and employee costs being 20% lower in today than they were even 8 years ago. Almost 2,000 per employee lower which can be invested back into employees and into the business.
Five Step Plan to How We Lowered Employee Benefit Costs
Belief/Education: The first step is the hardest. You have to educate yourself on how the industry works and what incentives are in place. You have to learn about other companies that are doing thing differently and start to believe that it can be done.
Partners: The next step starts with your broker/advisor. Not all advisors are the same and frankly most are compensated more when you lose (ie when premiums go up). You need to find a partner that sits on your side of the table and that is not selling you insurance, but helping you buy insurance.
Plan Design: There are plan designs that are set up for the insurance carriers and selling brokers to win and there are other plans that set up for employers to win. You need to implement a plan design that protects you in high claim years and lets you reap the benefits of low claim years.
High Utilizers: The one thing that drives your claims more than anything are the few high utilizers. On average half of your employees won’t even use the plan. But yet there are around 5% of your employees that will make up 50% of your claims. Employers have to have a plan in place to manage these claims.
Pharmacy Costs: Speciality drugs are making up an increasing large amount of the total spend. Employers need to partner with solution providers that will help manage these rising costs.
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