I feel like I'm a victim of the marketplace when it comes to my benefits renewal.

Time and again the cost of health insurance emerges as one of the greatest risks facing businesses.  More than ever, a new approach must be taken.

Traditional Approach:  Tweak what you've got

There are a host of tactics employers utilize to keep benefit costs at acceptable levels.  Making changes like raising deductibles, co-pays, shifting contributions, etc. are ways to try to reallocate the costs of the plan.  The other option is to shop plans around with the idea that more competition = lower costs.

And when these options run out, employers have turned to wellness as a way to try to minimize the claims that drive costs.  But the reality of it is that most employers don't see the ROI on the wellness investments they make, or they purchase a fully-insured plan that doesn't reward them for the efforts they've made in living healthier lifestyles. 

Eventually, employers start to run out of options.  Cutting benefits only aggravates employees.  And when it comes to shopping around, insurance companies can charge whatever they want because they're under no obligation to write your insurance.

Innovative Approach:  Find creative ways to finance risk

Health Care Reform has created massive disruption for employers.  For many, it has created many opportunities to drive down costs and will be remembered as a tremendously positive event.  But for those who don't go on the offensive and get ahead of the trends in the marketplace, the worst maybe yet to come. 

As the landscape of health insurance changes, it's becoming all about "pools."  Historically, 80% of the marketplace was lumped into pools minimizing how much credit an employer got for their own claims experience.  In either good or bad claim years, they got what the market gave them.  Wellness wasn't effective because these employers never saw claims data and couldn't manage what they couldn't see.  They were thrown into community-rated programs that focused little on the health of the group and relied solely on demographics.

Today, a massive shift is underway for employers to seek out programs where they're rated on their own claims experience and their own merits.  Programs that offer some incentive for good performance sets employers on the course to self-fund some portion of their program, with minimal downside risk.  Health care reform has created a whole new set of financing structures. This gives employers many more options than the only two they've historically faced - which was choosing between fully-insured or self-insured.

This means structuring a plan that actually rewards the employer for superior performance.  Many companies focus on transferring all of their risk with the misconception that this is the most cost effective solution for their business. Unfortunately, they are missing a lucrative opportunity to drive down premiums and claims. There are alternate risk financing strategies that allow your business more transparency of what is driving premiums and will offer more control over medical costs and claims.