Health Plans
100+ Employees
Because of your size, you have considerable flexibility regarding the types of health care plans you can offer your employees, as well as how you will fund them. And, because of the statistical credibility inherent in a large group, you are better able to correlate premium costs with actual claims experience. As a result, plan design, including chronic disease management and wellness programs, can have a long-term positive impact on your claims experience and costs.
How rates are established:
Groups with 100 to 300 employees are not large enough to be statistically credible on their own so insurers assess the claims experience of your group with the performance of the entire rating pool to create a more balanced determination of rates. You will benefit during years in which your group’s claims experience is lower than the pool’s average, and vice versa. Costs can be expected to average out over a long-term period.
Groups with more than 300 employees are considered to be statistically credible and are not matched with the performance of the rating pool. To determine your first-year rate, an underwriter will look at 12 recent months of claims experience, add a factor to cover inflation, and determine what your next 12 months of claims costs should be.
In the large group health insurance market, three components determine what you pay:
- Plan Administration—managing the provider network, processing claims, producing member materials, etc.
- Risk Insurance—protecting the employer from the costs of a catastrophic claim
- Claims Payment—paying for medical care and related services
More then 80% of costs go directly for paying claims. Therefore, the key to managing large group risks is to focus on managing claims through prevention, better management of illnesses and care, and taking advantage of discounted fee schedules with networks of health care providers. In addition, you may want to adjust your plan design by looking at the level of coverage you provide, how employees access it, and how much they contribute out-of-pocket to help pay for it.
Should you self-insure?
There are a number of ways to finance your health plan premiums. Whether or not you decide to self-insure depends largely on your tolerance for risk as well as your ability to manage costs in a year when claims are substantially higher than anticipated. If you choose to self-insure, you are essentially paying a la carte for the three cost components mentioned above, with the hope that you will save money on what you have to pay out for claims. United Financial Solutions can counsel you on all aspects of premium financing so that you can determine if self-insuring your plan is appropriate for your organization.
Selecting United Financial Solutions to be your broker is the most important decision you will make in meeting your insurance needs. Our expertise and familiarity with various health insurers will guide you through a comprehensive analysis of your needs to determine optimal solutions for providing a competitive, affordable plan.