Value Based Design
Intermountain Insurance Services believes that the key to any health plan is to create a value based benefit design. Employers should now be looking for evidence based benefit designs that are developed to help steer those on the plan to appropriate and effective clinical intervention.
This requires strategic prevention in conjunction with effective treatment with high performing providers. In order to create a design that works it requires commitment from all players involved, including senior management, health plans and providers.
This approach allows the employer to fix a system that is less than efficient to say the least. Currently in the marketplace benefit designs are founded on putting restrictions in place rather than incenting positive behaviors. Statistics show however, that 80% of all large claims are a direct result of lifestyle choices. A large part of this problem is that the distribution of benefits is not directed to those with medical needs or those at high risk.
This current benefit design has created a short term gain resulting in long term loss. There is a tremendous amount of evidence that demonstrates cost shifting leads to decreases in essential as well as non-essential care.
Ask our clients. Remember, over the past 5 years our clients have enjoyed an average decrease in overall healthcare costs. We let the numbers speak for themselves.
Fully Insured Plans
In a traditional fully insured health plan, your company pays a premium. The premium rates are fixed for a year, and you pay a monthly premium based on the number of employees enrolled in the plan. Your monthly premium only changes during the year if the number of enrolled employees in the plan changes.
The insurer collects the premiums and pays the health care claims based on the benefits in the policy you purchased. The covered persons are responsible to pay any deductible amounts or co-payments required for covered services under the policy.
Partially Self-funded Plans
The cost of a self-funded plan has fixed components similar to an insurance premium, e.g., administration fees, stop-loss premium, and variable costs (the claims expense). The administrative fees, stop-loss premiums, and any other set fees charged per employee are referred to as fixed costs and are billed monthly based on plan enrollment just like an insurance premium. The employer sponsoring a self-funded plan also pays the claims costs incurred by the covered persons enrolled in the plan, and this cost varies from month to month based on health care use by the covered persons. Stop-loss insurance reimbursements are made if the claims costs exceed the catastrophic claims levels in the policy. So the total cost of a self-funded plan is the fixed costs plus the claims expense less any stop-loss reimbursements. Even though these plans are called self-funded plans, an employer typically does not assume 100% of the risk for catastrophic claims. Rather, the employer buys a form of insurance known as stop-loss or excess-loss insurance to reimburse the employer for claims that exceed a predetermined level. This coverage can be purchased to cover catastrophic claims on one covered person (specific coverage) or to cover claims that significantly exceed the expected level for the group of covered persons (aggregate coverage).
Health Reimbursement Accounts
Employer-funded plans that reimburse employees for incurred medical expenses that are not covered by the company’s standard insurance plan. Because the employer funds the plan, any distributions are considered tax deductible (to the employer). Reimbursement dollars received by the employee are generally tax free.
Consumer-Driven Plan Designs
Transforms the third-party reimbursement system into one that puts economic purchasing power and decision-making in the hands of the consumer. Supply’s the information and decision support tools needed, along with financial incentives, rewards and other benefits that encourage personal involvement in altering health and health care purchasing behaviors. Letting consumers, rather than health plans, control health care decisions.
The program design options hinge upon the goals/objectives and desired outcomes of your program. If your goal is to help workers make a change behavior, cut risk factors, or save health care dollars then your wellness program would be designed to accomplish those outcomes and a budget would be crucial to support that design.
Group life insurance is a contract between the policy owner and the insurer, where the insurer agrees to pay a designated beneficiary a sum of money upon the occurrence of the insured individual’s or individuals’ death or other event, such as terminal illness or critical illness. In return, the policy owner agrees to pay a stipulated amount at regular intervals or in lump sums. This benefit is offered through payroll deduction.
Health Savings Accounts
An account that is a tax-advantaged medical savings account available to taxpayers in the United States who are enrolled in a High Deductible Health Plan (HDHP). The funds contributed to the account are not subject to federal income tax at the time of deposit. Unlike a flexible spending account (FSA), funds roll over and accumulate year to year if not spent. HSAs are owned by the individual.
Flexible Spending Accounts
Is an account that is one of a number of tax-advantaged financial accounts that can be set up through a cafeteria plan of an employer in the United States. An FSA allows an employee to set aside a portion of his or her earnings to pay for qualified expenses as established in the cafeteria plan, most commonly for medical expenses but often for dependent care or other expenses. Money deducted from an employee’s pay into an FSA is not subject to payroll taxes, resulting in a substantial payroll tax savings.
Long / Short Term Disability
Short-term disability (STD) insurance pays a percentage of your salary if you become temporarily disabled, meaning that you are not able to work for a short period of time due to sickness or injury (excluding on-the-job injuries, which are covered by workers compensation insurance). A typical STD policy provides you with 40 to 65 percent of your pre-disability base salary these benefits generally last between three and six months. Most STD policies have a “cap,” meaning you receive a maximum benefit amount per month. STD policies also have a limit on the amount of time you can receive benefits — up to two years.
LTD picks up where short-term disability (STD) leaves off. Once your STD benefits expire, the LTD policy pays you a percentage of your salary, usually 50 to 60 percent, depending on your policy. You will then receive benefits for two to five years or until you turn 65.
Meetings are provided each year to communicate benefits. This is one of the most important aspects of a benefit package.
Many forms of prescription plans can be implemented and networks arranges depending on the goals and needs of the company. Cost sharing and flat fees are the most popular forms of payment at the pharmacy after presenting a discount card from the insurance company.
The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances such as voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death, divorce, and other life events. Qualified individuals may be required to pay the entire premium for coverage up to 102 percent of the cost to the plan.
COBRA generally requires that group health plans sponsored by employers with 20 or more employees in the prior year offer employees and their families the opportunity for a temporary extension of health coverage (called continuation coverage) in certain instances where coverage under the plan would otherwise end.
COBRA outlines how employees and family members may elect continuation coverage. It also requires employers and plans to provide notice.
Dental insurance is insurance designed to pay a portion of the costs associated with dental care. There are several different types of individual, family, or group dental insurance plans for purchase. In general, a dental insurance plan covers a percentage of the dental charges incurred at a dental office. They have a wide range of coverage options which may include free preventative services such as cleanings. There is no industry standard annual maximum limitation, deductible, or co-pay.
Vision insurance is a form of insurance that provides coverage for the services rendered by eye care professionals such as ophthalmologists and optometrists. There are many vision insurance companies. The typical vision insurance plan provides yearly coverage for eye examinations and partial or full coverage eyeglasses, sunglasses, and contact lenses, with or without copays, depending on the plan chosen.