Self-Funded Benefit Programs from the Employee Perspective

As predicted, we saw healthcare costs rise in 2020, and unless we see a dramatic shift in health care legislation, those rates won’t go down anytime soon.  More and more mid-sized companies are making the shift to self-funded programs to manage costs and have more control over their spending.  Do these programs also benefit the employee?  In our opinion, if they are done correctly, we say “absolutely!”

First, is self-funded the right choice for you?

Traditionally an option for larger companies who can spread the risk across large workforces, self-funded employee benefit programs have now dipped down into the middle market.  How?  We have a lot more data, and we’ve learned how to analyze it and use it for predictive modeling.  In other words, we have a better grasp of what will work and what won’t – mitigating the financial risk for smaller companies.

Self-funded insurance plans are designed based on employee health requirements. The more data you have and the more in-tune you are with your employees, the better program you can develop.  It seems simple, but it’s a tad more complicated than just reviewing some health care costs, knowing how many smokers you have, and taking a look at how often folks are using the gym.  You have to do an in-depth analysis, identify trends, and be aware of shock losses. Shock losses are “out of the norm” claims, and shouldn’t be included in your predictive modeling, but you do need to prepare for them.

If self-funded is something you are pondering, your first step is to have a good, long conversation with your benefits broker.

Employees first

Now that you’ve decided self-funding is the right move – the next critical step is ensuring it’s a real benefit for your employees as this is far more important than just your bottom line.

Be transparent

Self-funded plans have gotten a bad reputation in the past from the employee perspective due to denied claims, runaround with third-party administrators, and the proverbial buck being passed.  You want to avoid this type of employee experience. It’s critical to be open about what “Self-funded Benefits” actually means to the employee.  What happens if they get cancer, and the cost is over a million dollars? What happens if they want to use experimental drugs? These “what if’s” are what your employees want to know and deserve to know.

Be clear and put everything in general education terms, not insurance-jargon language. As with all benefits programs, it’s essential to have an employee advocate – someone at your company that is the “go-to” when your employee has a problem, question, or total melt-down.

Over Deliver

You have the data. Now is the time to use it for the employees’ advantage! Since your program is designed around what your employees need – over deliver.  If you have a large veteran’s contingency, you may have an abundance of PTSD and employees suffering from a myriad of mental illnesses. Consider going above and beyond just giving them an insurance card and offer flexible counseling sessions, flexible time off, and other support systems specifically for them.

Perhaps you see a lot of Type 2 Diabetes trending. Creating support and wellness programs specific to the employees who would genuinely benefit not only helps the overall health of your business, but it sends a message that “my company cares and has our needs at the top of their mind.”

Over delivering doesn’t have to be another line item on the budget. Many of the suggested programs could simply be affiliate programs with local businesses such as counseling groups, gyms, weight loss programs, etc.  Making it part of your culture and having that key person in charge will go a long way in ensuring employee engagement and success.

Utilizing Technology – the Rise of Telehealth

Telehealth is on the rise, and it isn’t going away anytime soon.  The COVID-19 pandemic pushed non-users and non-believers of diagnosis by technology versus face-to-face into the “where have you been all my life” contingency.  Most telemedicine is offered free or at minimal cost to employees. It’s convenient and a time saver.  The reduced visits to doctor’s offices, ERs, and Urgent Cares for minor routine ailments, also reduce the cost back to the employer. For most employees, once they discover the ease of telemedicine, they are hooked.

Your Why

To ensure your self-funded program is the right move for your employees, it all starts with the data and working with your insurance broker to create a plan that is efficient and effective. Once you identify the specific data trends and what your employees’ needs truly are, the rest of the pieces fall in place.  For more information about self-funded programs, or if you’d like a review of your current one – contact a Horton team representative.