Chances are you know how much you spend on your current health insurance plan, but do you know how much is actually being spent on care? Imagine discovering over $100,000 of unused revenue within the cost of your health insurance plan.
Most business owners know the importance of monitoring their investments and calculating their risks carefully throughout the year. However, the same attention is not always given to health insurance plans. Rises in healthcare costs, increased annual premiums, and general changes to the company such as growth and expansion are all reasons the cost of your health insurance plan can change.
Adjustments like these are why digging into your plan’s data is essential. You may be missing opportunities to make your plan more effective, both in terms of the impact of dollars spent for your people as well as reducing overall costs. Using the help of an experienced health insurance advisor can be beneficial in accessing the information you need.
You never know when a significant change can be made.
For example, we recently had a discussion with an employer who felt their health insurance plan was too expensive. The employees weren’t happy and although the employer thought he was overpaying, he couldn’t be sure.
The answers are in the data
He provided insurance for about thirty employees with a traditional ACA pricing plan and spent $403,000 annually. After obtaining 100% of the company’s claims data, we discovered that their total claims were $226,000.
Yes, he was definitely overpaying.
Unfortunately, with a traditional plan and the way this insurance market works, our client was sure to see this rate continue to rise, regardless of their claim history, because there are no credits for good claims.
By digging deeper into the data, we noticed that two medications were driving $138,000 of the historical claim costs. That worked out to be 7% of the employee membership, which is less than half the expected 20% of membership, contributing to a significant portion of the plan costs.
Further analysis showed that of the $138,000, each employee was paying $350 a month for medication. That’s $4000 a year. These costs were on top of what our client was spending in health insurance for their employees.
After evaluating the data, we developed a plan in which the employer now pays a total medication plan of $34,000, saving the company $104,000 and the employees their monthly costs as well.
Open the doors to possibilities
By accessing data within your health insurance plan you could reverse the trend of rising costs and put the extra revenue towards sustainable growth and investments such as:
- Business improvements. Reinvest the money into the business by strengthening company infrastructure, improving equipment, investing in new machinery or improving client/customer experience.
- Give back to your people. Consider building a benefits plan developed with your people in mind, invest in training programs or create a new company culture.
- Update current marketing campaigns. The digital world is always changing. Streamline social media accounts or ad campaigns. Invest in performance metrics.
- Save for hardships. Cash flow is fundamental for any business, making sure there is money set aside for unexpected expenses can help protect your business.
- Hire more help. Keep operations running smoothly by hiring new leaders or expanding in technical, marketing, insurance and Human Resource departments. Consider outsourcing tasks to specialized companies, such as advisors, advertising agencies and accountants.
When it comes to health insurance plans, getting the most for each dollar spent is a realistic expectation and one that is often overlooked. Unlocking potential revenue from your current health insurance plan can not only increase employee retention, recruitment, health and happiness but expand company growth.
If you have any questions about how your money is being spent within your health insurance plan, let’s schedule a meeting today.