Business Man in Suit holding up five fingers.

1. Watch out for unhealthy habits

We’re not talking wellness, smoking cessation, and poor eating habits. The unhealthy habits we’re seeing have infected your perception of plan options as a buyer. We’ve all developed these habits over time, and now our healthcare vendors have us hooked. This year, we’ll need to watch out for terms like medical “trend,” increased “Rx utilization” and “increasing cost of care” as we explore our renewals and plan options.  Use these terms as triggers. When your agent mentions such topics, ask for more info and seek to find the meaning behind each “earned” increase in your medical spend. Nearly 80% of employer-sponsored health plans DID NOT deserve or “earn” a premium increase for 2018, yet less than 10% reduced plan premiums, mostly through switching insurance carriers.

 

 

2. HSAs are dead. 

Not dead-dead, just not working like you thought they would. Sure, a qualified high deductible health plan (QHDHP), or HSA plan, does cost less premium. That’s because this higher deductible applies to all non-preventative services. So, if you’re sick, and need treatment, including on-going condition maintenance, you’ll be spending your own money. Recently, studies at Harvard, Kaiser, and Mayo Health, show that employees with high deductibles have a much higher risk of treatment non-conformance, primarily because of empty Health Savings Accounts. If you’re considering an HSA plan offer, consider how your members may be affected in year 2, 3, and 4. If you plan to sunset, or eliminate employer funding at any time (or never plan to help fund your employee’s HSAs) you are likely setting your employees up for unexpected financial burden. Either help fund it, or take HSA education seriously, enrolling only those that “get it.” Full transparency; my family is insured with a QHDHP for the triple tax savings. So, again, not dead-dead, just don’t let your agent use “HSA conversion” to stave off a premium increase. Bad move as a plan sponsor, short term win, but long term… meh. @grouploxley

3. Streamlined HR (your AI overlord is here).

We think the scope of Human Resources has finally hit critical mass. Sure, there is always a need for an onboarding team, recruiters, and friendly folks to ask “why’s my paycheck off, Janet?” But do we need a 10-member HR team? This landscape for you, as a business leader, has changed dramatically. In the past, we had paper checks, and payday was an event… with real human interaction too! Well, today, this has all changed. Technology should automate your paychecks, compliance, onboarding, benefits OE, and more. However, with increasing government regulations and employment practices compliance, HR has become a function more aligned with risk management, than revenue production. You’ve probably already bought the technology, but your HR team is still ‘staying busy’ making sure it works. Take back your business plan in 2019, and outsource the HR mundane. It does not pay to have Janet & Jimmy chasing health insurance enrollments. Get them back to recruit, train, support, repeat! AI (or an HR outsource firm) can handle the paperwork.

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4. Negotiate direct with doctors & providers

There has never been a better time to start talking directly to your healthcare providers about the cost of care. (There’s also never been a more complicated time). The cost of healthcare has been under attack since well before ACA, and it hasn’t shown signs of weakening, until 2018, and it has everything to do with transparency, and CMS’ FAQ mandating public (online) “charge masters” for hospitals. But, if you call will doctors talk? Big hospitals, networks, and insurance carriers are not particularly interested in this conversation, but they will in 2019 as independent providers steal their business with upfront negotiations of non-emergent procedures. Already, direct negotiations between employers and providers has borne fruits in the form of :

  • zero patient responsibility (deductible and coinsurance), and
  • reductions in payor costs up to 40%. 

That’s a like a knee replacement costing $21,000 instead of $50,000. Of course, this only matters to you [as a plan sponsor] if you receive the reward of this negotiation, so fully-insured groups need not apply. Good luck working through network (PPO, HMO, POS) fine print in 2019. It will get worse before it gets better. You think hospitals don’t want to talk? Try asking a “network” how they make money.

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5. Cut Cost or Cut Value, your choice.

We’re expecting a downturn in 2019, an actual, significant, decline. A recession will change your perspective of employing people.  Business has been good for a while now, and benefits packages have maintained value with most employers passing on little increase cost to their members. However, many manufacturers already see a reduction in orders, among other impactful changes like tariffs and wage law for mandatory medical leave. So, you’re likely going to cut something in 2019. Do you want to reduce cost or value? Cost right? Well, without proper benefit planning, you’ll probably be forced to cut value, in the form of increased patient responsibility (deductibles, copays, etc.) or increased payroll deductions for your employees.  Both strategies reduce the company’s cost of your plan, but your team will lose interest in the value of your benefits, leading to discussions about increasing hourly rates (or unemployment tax if you don’t).  Or, maybe this is the year to add an HSA and let your employees fund the whole thing. (sorry, joking, don’t do that!)

…. Or, maybe it’s time to fix the root cause. Start pealing back the layers of the healthcare onion. There’s a lot of middlemen to avoid, and dollars to save.

#ofloxley #keepitsympl #healthinsurance

Author: Wes Spencer

@grouploxley

Copyright, Loxley Group, LLC, all rights reserved.

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