R&R Insurance Blog

Does your organization desire the freedom of a self-funded insurance plan, but need a little more certainty for budgeting concerns? If so, level funding might be the answer to your employee benefits questions.

Level funding is an option that can coincide with a self-funded plan. With level funding, employers pay a set amount each month to a carrier. This amount typically includes the cost of administrative and other fees and the maximum amount of expected claims based on underwriting projections, as well as embedded stop-loss insurance.

Pros of Level Funding

• Do not need to pay premiums that are based on community rates
• Only pay the actual claims + administrative fee
• Money set aside each month to cover claims that is NOT used will be refunded at the end of the year from the surplus

Cons of Level Funding

• You will still need to pay the claims
• The administrative fees may cut into the savings you hope to gain from having a self-funded plan
• Many level funding plans restrict their offerings to companies with a certain number of employees

R&R Insurance has extensive experience in the world of employee benefits. We welcome the opportunity to discuss the pros and cons of level funding for your organization.

Information provided by Zywave, Inc.

Having an attractive employee benefits option is more important than ever before. Attracting and retaining talent has become increasingly difficult and offering a quality benefits package can play a large role in the process.

In addition, you may want to protect your company from the risks associated with offering employee benefits. While employers have traditionally insured their employee benefits risks through an outside insurance carrier, the increased demand for employee benefits has resulted in an inflation of costs. Because of this, many employers have opted to cut out insurance carriers altogether and fund their group employee benefits risks with captives.

If you aren’t familiar with captives, let’s start with the basics. Captives are a form of self-insurance in which the insured owns the insurer. They are created and owned by at least one non-insurance company for the purpose of insuring the employee benefits risks of its owner.  A captive can offer significant savings and become a substantial long-term investment. However, they may not provide the same benefits for every company, and the return on investment may be low.

R&R Insurance has extensive experience in the world of employee benefits. We welcome the opportunity to discuss the advantages and disadvantages of captives with your organization.

Narrow networks are health plans that offer their subscribers a limited choice in health care providers. Health plans contract with a select group of doctors, specialists and hospitals, making those entities considered the in-network.

Because all plan participants are directed toward certain facilities and physicians, these providers can then reduce the cost for each visit and service – operating under the idea of buying in bulk. This results in lower premiums for the consumer and cost savings for insurers.

Benefits of Narrow Networks:

• Lower premiums
• Lower costs – such as employers directing employees to providers in a lower range
• Improve the heath care relationship – doctors in-network may use the same electronic medical record system allowing coordination of sharing medical info among health care providers
• Greater consumer awareness – allows employees to better understand and budget for their health care expenses

Disadvantages of Narrow Networks:

• Possible restricted access – restrictions and finding new health care providers who aren’t in the narrow network
• Surprise out of network bills – many hospitals contract out for emergency physicians, radiologists, and anesthesiologists. So while the hospital may be in-network, the doctors performing a certain surgery may not be, resulting in huge out of network bills
• Rural care – many times there are not enough in-network providers in the area resulting in long wait times or long distances

Educating employees about narrow networks is imperative. Provider listings must be kept up to date and employees should have easy access to this information. Transparency about access and costs is key, since failing to provide accurate information could result in surprise out of network bills.  

An alternative to narrow networks is a hybrid option which takes the selective ideas from narrow networks but broadens it, so users have a choice between which provider-tier they want to work with. Members still have the flexibility to choose any provider but they may pay more out of pocket costs when they do not seek care from quality and cost effective doctors.

For further information on narrow networks and the hybrid alternative, contact your knowledge broker.

In an article by SFM (full article), the New England Healthcare Institute reports the national overuse of hospital emergency rooms results in $38 billion in annual wasteful spending. And that an estimated 56% of ER visits could be avoided! Not only is it costing the individual more money, but it is also costing the employer more money in terms of their health benefits and/or work comp costs.

Aside from the dollar figures associated with visiting an ER instead of primary care provider, the quality of care varies as well. An ER is equipped for the doctor to do the initial triage treatment and delegate any follow-up care. There tends to be lack of long-term treatment for the patient. Which could ultimately cost more money for additional treatments if a long-term treatment plan is not discussed at time of injury.

However if a patient is able to visit their primary care provider, an urgent care facility, or a specialty clinic, it typically has a more ideal outcome as the individual is treated by a specialist who is able to guide the treatment. Ultimately, staying out of the ER when possible will lead to better medical outcomes, less frustration, and reduced costs.

WellCompForLife can reduce costs for your health benefits AND work comp to positively impact your bottom line.

No one day is the same for Lisa Bergersen, HR Director with the City of Pewaukee. In addition to administering personnel benefits, Lisa also works closely with the common council, mayor and city administrator on unemployment and HR strategy. Many time-sensitive occurrences happen on a day-to-day basis that require quick decisions and Lisa’s immediate action. Through the city of Pewaukee’s partnership with R&R Insurance, Lisa has defined the following 3 factors as important components to the customer service provided by her Knowledge Broker.

1. Quick Answers:

Getting the answers you need in a timely fashion is a customer’s expectation of any service provider. When your question impacts the lives of many and has a financial impact on taxpayers, quick response is an even more critical element to the level of customer service provided. With Lisa Bergersen’s role directing HR efforts for the city of Pewaukee, she leans on the expertise of her R&R Insurance Knowledge Broker for answers to her questions. Everything from personnel issues, group benefits, policies and legal matters; questions should be addressed in a way that makes you feel like you are your agent’s only client.

2. Strategy:

Oftentimes when we receive an answer to our question, we are left with the feeling of ….what now? Co-workers and team members do not always possess all the information or expertise needed to make the best decisions for an organization or business. Having the confidence to rely on a consultant who specializes in municipal insurance matters can provide efficiencies and save money. Lisa finds value in having the opportunity to talk through occurrences and issues with her R&R Knowledge broker so that a recommended strategy is put into place. They work through the overall direction to handle the situation while giving thought to minimizing risk and the appropriate communication to be shared among employees and / or residents.

3. Action Plan:

Her law school experience has helped Lisa understand the importance of asking the right questions and expecting timely response in order to be efficient and effective in her job. Creating an action plan with the help of her agent may be the most crucial factor when human resources and other municipal insurance issues arise. Knowing you have a knowledgeable resource to lend credibility and ensure no details are overlooked can provide incredible peace of mind.

Relying on specialized, service-centric experts to provide municipal insurance consultation and risk management recommendations is key to successful city and village administration. Service focused on timely response, strategy development and action plans will help representatives create efficiencies and keep costs down.

What municipal insurance challenges does your city or village face each day?

As an Employee Benefits Producer for R&R Insurance, I have access to some tools of our trade that business owners and HR professionals may not be privy to. I came across an article in Employee Benedit Adviser that discusses the multi-employer study by Health Management and Towers Watson. The study confirms what we've been promoting here at R&R. The bottom line for employers is that if you start to change employee behaviors, you will start seeing health care cost savings very quickly. The research is saying - within 1 year! Here is an excerpt from the research study as well as a few links to this information that I find worth sharing.

Although health risks have been directly associated with higher health care costs, and a growing body of research shows that improving health can generate a positive long-term ROI, there has been limited research on how soon cost savings begin accruing and the relative cost impact of health risk accumulation versus health risk reduction.“This research not only demonstrates the level of savings that can be expected, but it also begins to show how soon employers can expect to begin realizing some change in costs as a result of a change in health risk status,” said Steven Nyce, senior economist at Towers Watson and lead author of the study. “This is crucial information for employers that have made a commitment to improving the health and productivity of their workforce. It also should enable employers to attract more senior management support for investing in these programs.”

Implementing strategies to help workers stay healthy is critical to controlling costs. At R&R, we take wellness to a whole new level. Wellness programs will increase the health and longevity of employees and their families –which means that businesses can have a lot of control over their health insurance costs and the productivity of their employees – control that they don’t know they have. At R&R Insurance, we call this program WellCompForLife!

Join the WellCompForLife discussion on LinkedIn!

StayWell Health Management and Towers Watson’s breakthrough study confirms that population health management will reduce employee health risks and produce short-term cost savings in as little as one year.

Study: Preventing Health Risks Has Rapid Payoff

The study, “Association Between Changes in Health Risk Status and Changes in Future Health Care Costs: A Multi-employer Study,” was published in the November 2012 issue of Journal of Occupational and Environmental Medicine (JOEM) and is available on the JOEM website.

For more information about WellCompForLife, about self-funding your health insurance plan, health care reform or basic employee benefits questions, contact knowledgebroker Riley Enright.

Maurice Evans, Jr., director of HR for Integral Group, LLC had perfect vision when he educated his workforce about the fact that diabetes can complicate vision.

If employees can't see, then they certainly can't see to do their job! Great point! Takeaway - better vision = increased productivity! Evans saw a 30% increase of vision plan participation by his employees with a little bit of education about the correlation and the benefits of good vision. read full article in Employee Benefit News.

An affordable vision plan, as well as many other voluntary benefits, can add some meat to your wellness program, increase the productivity of your employees and keep you on the front edge of competitive offerings as an employer of choice. For more information about ancillary or voluntary benefits for your employees, contact knowledgebroker Riley Enright.

At R&R, we are seeing more and more small businesses in Wisconsin having serious discussions about the link between obesity and workplace productivity. On top of that – when you factor in wellness programs that will increase the health and longevity of employees and their families – small businesses can have a lot control over their health insurance costs and the productivity of their employees – control that they don’t know they have. At R&R Insurance, we call this program WellCompForLife! Join the WellCompForLife discussion on LinkedIn!

With Obamacare, there are 1,500 pages of regulations being created every week that will forever change the way the individual and small businesses pay for health insurance.

In the largest redistribution-of-wealth scheme this country has ever seen, 'Obamacare' will begin a series of annual assessments and taxes on insurers to the tune of over $14 billion in 2014 and $18 billion in 2018.

Exploring creative strategic alternatives like private insurance exchanges, self-funding and co-employment partnerships are wise considerations. As well, businesses need to make sure that they are receiving more than just health insurance from their broker. Risk management, compliance, health and wellness, communication and education as well as individual insurance options should be on your radar.

Join our group on LinkedIn: Obamacare: Strategies for Business to Survive. We welcome you to join in the conversation with our LinkedIn group dedicated to discussions for business owners on Obamacare: Strategies for Business To Survive. Read articles, download documents, join the conversation, and add your expertise!

Here are 5 easy things to remember to help save yourself some money when it comes to your own health care costs.

1) Compare costs of health care services

• Check with your doctor or health care facility and compare the cost of services before receiving care
• Make sure the charges are covered by your health care plan.
• Employees can use health care transparency tools to help estimate costs.

2) Prescription choices

• Generic prescriptions are a great choice for less cost.
• Utilizing a split-pill or mail order program can also save you a lot of money.

3) Choose In-Network Options

• Choose in-network providers.
• When doctors order routine lab work or when you enter a health care facility for services, always as for an in-network option.

4) Save emergency rooms for emergencies

If you are not experiencing a true emergency, visit your doctor or go to a walk-in clinic.

5) Take care of health conditions before they become costly

• Costs related to chronic conditions can be kept in check when employees learn how to improve their overall health.
• Participation in an annual bio metric screening is a good way to start understanding your own health.

For more information about WellCompForLife, about self-funding your health insurance plan, health care reform or basic employee benefits questions, contact knowledgebroker Riley Enright.

Join our group on LinkedIn: Obamacare: Strategies for Business to Survive. We welcome you to join in the conversation with our LinkedIn group dedicated to discussions for business owners on Obamacare: Strategies for Business To Survive. Read articles, download documents, join the conversation, and add your expertise!

NorthBay Adventure, a small Maryland adventure camp for 6th graders with 30 employees, is making then news because they became self-insured last year. As a result, they are saving 45% on their health care insurance costs, and they have basically removed themselves from the ACA requirements. As noted in the article from Kaiserhealthnews.org, self-insuring is a loophole for the small employer to get out of the ACA requirements.

Credit: KAISER HEALTH NEWS / Kyle Grantham for USA TODAY

More and more small businesses like NorthBay are avoiding the health act's requirements through self-insuring coverage.Self-funding in the past has been more typical for larger employers. Self-insured employers pay for most worker health costs directly, though they contract with an insurer or other company to administer claims. The employers also buy coverage known as stop-loss for claims exceeding a certain amount.Free Download: Loopholes for Self-Funded Plans document

For more information about WellCompForLife, about self-funding your health insurance plan, health care reform or basic employee benefits questions, contact knowledgebroker Riley Enright.

Join our group on LinkedIn: Obamacare: Strategies for Business to Survive. We welcome you to join in the conversation with our LinkedIn group dedicated to discussions for business owners on Obamacare: Strategies for Business To Survive. Read articles, download documents, join the conversation, and add your expertise!

Learn how Voluntary Benefits are impacting small businesses and their ability to attract and retain employees during this time of benefit change.