Companies with 50-99 employees are considered a large group in Indiana which allows Insurance companies to perform underwriting on Indiana Group Health Insurance plans. Underwriting enable an employer to exit the community rated market of the small group, which can create savings or increase costs. Being considered a large group gives companies health claim experience will have an impact on the premium.
Companies with 50-99 employees start to gain access to claims data. The claims data will provide a snapshot of what services the employees and their dependents are utilizing. This information can then be used to steer members to more cost-effective claims services. If a company is experiencing a higher than usual amount of emergency room services that are determined not be true emergencies, a group could develop programs to educate their members on alternate services that are outside the emergency room. This can be as simple as informing members of a 24-hour nurse hotline.
Managing healthcare risk through plan designs can have a significant impact on cost. Offering a low out of pocket health plan can create a lack of healthcare consumerism while providing a large upfront out of pocket can be viewed as having little value. Offering the right balance in plan designs can be considered to be a valuable employee benefit while at the same time controlling cost through consumerism and educations.
Pharmacy data is another area of that the medium-sized business now has access too. This data will show the medications with the highest use along with the medications that cost the most. With this information, an employer can start to make an informed decision on the best option for a prescription drug plan. With this data, a company can now begin to see how effective a step therapy drug program by simply determining if the lower cost drug in the category is successfully treating that membership.
The ability to view the costs of treatment for specific conditions can be an eye-opening experience to a group that is seeing those costs for the first time. Quickly the data will show which hospitals have a higher cost of treatment and that information can be used in network access decisions.
With claims data as a group can get a snapshot if a disease management program is effective at controlling costs. Some fully insured insurance companies do a better job than others. Even if that program saves just a few percentage points I cost, that can create significant savings over the course of the year.
When companies have over 50+ employees the cost of the health plan can reach the high six figures or even seven figures. These are real dollars to both the employer and the employee. Establishing an active strategy for controlling costs will start with your broker.
Market conditions play a significant role in controlling costs, and insurance companies will have cycles where they are competitive and want to aggressively attract a group with 50+ employees. At the same time, insurance companies that have large older blocks of business in the 50-99 employees’ segment may increase renewal rates based on how that overall block is performing. A group could see as much as 40% off their renewal determined by entire block. At the same time, an Insurance company may decide they want to increase their off Jan. 1st renewal business and become very competitive in the second and third quarter of the year.
Most mid-market companies should also entertain the level-funded products the industry offers. The group that qualifies can experience double-digit decrease vs. the fully insured markets. It can be a bit complicated moving from fully insured to level funding. The smaller insurance companies are going to require medical applications to be completed, which can be a task if there is not a current benefits administration system in place.
Companies with 50-99 employees should look at using a benefits administration system for both employee onboarding and benefits enrollment. The benefit admin system will allow for paperless enrollment and benefits education. This creates many time savings for control or HR person that has additional responsivities other than benefits.
There are all types of benefit admin systems where some are integrated with payroll and HRIS platform. Here at Nefouse and Associates, we offer a benefit admin system as one of our provided services
A favorite technique group will use to confirm if their current benefits are competitive is benchmarking. When it comes to attracting and retaining employees benchmarking will allow a company to determine where their current benefits package compares to its industry standards. One method is to benchmark the current plan offering vs. other organizations of the same size and industry. Benchmarking benefits vs. larger organizations in the same sector may also be a good idea if the company is recruiting from large entities. Here at Nefouse & Associates, we offer benchmarketing from a database that has included 30,000+ employers, and we can interrupt that information into so our clients can make informed decisions.