We recently had a major health insurance provider offer us a $15,000 bonus to bring back a pharmacy program that we took outside of their company. And although we don’t have the exact numbers, you can imagine how many brokers would be tempted to take the deal. 

After all, that is a significant amount of money to get paid for a client’s signature, who may never know the deal wasn’t in their best interest. For us, the move to the new program was in the best interest of our client and therefore was non-negotiable for movement back to the original provider, and we hope that most professionals would make the same decision.

Incentives like this are not uncommon in the health insurance industry. This example shows just how easy it is to offer a program, plan or policy that is not ideal for clients and how unfair these hidden commissions can be. 

Transparency in the health insurance industry

Under the new legislation, brokers, agents and advisors are required to disclose this information to their existing and potential clients. This allows employers to make better decisions about the health insurance they provide. The legislation also comes with new reporting requirements for your business, making transparency between providers and clients essential.

The Consolidated Appropriations Act requires brokers and agents to inform their clients of direct and indirect commissions, including any bonuses and incentives they may receive. These benefits, that are paid to brokers by insurance companies, have been around for a long time and can come in the form of luxury vacations, six figure bonuses, and yearly commission percentages. 

The earnings are legal and considered, by some, to be a cost of doing business. However, with the transparency act, employers will now have the opportunity to see information about what they are paying for and most importantly, if there are any conflicts of interest.

Employers are the ones who pay

Knowing this information is important for employers, because they, and their employees, are the ones that will pay for these incentives in the end. Sometimes the costs become wrapped up in the ever increasing yearly premiums. 

Not only are employers potentially paying more, they’re also at risk of being penalized for unreported information. Employers can be held responsible for any unclaimed taxes, costs and data that is not reported to the IRS or related institutions, which may lead to fines and charges for non-compliance. To avoid these circumstances, the necessary data and information must be provided by the broker and done so in a timely manner.

Know the questions to ask your broker

There are several questions that will help you get the answers you need from your broker such as:

• Are they receiving any outcome that is not commission based?
• Are they receiving a bonus for selling a certain kind of product?
• Are there hidden revenue streams and if so, are any of them contingent on selling a particular product?
• Are they able to give the data required to you in a timely manner?
• What is their process so you can complete any IRS forms that may be required?

Ultimately, if your broker isn’t truthful or responsive, you could end up being penalized. Our job as insurance advisors is to help you get the information you need, while also providing complete transparency about your health insurance recommendations and plans. If you have questions regarding your health insurance plan, how the new The Consolidated Appropriations Act affects you, or what questions to ask your broker, don’t hesitate to reach out. 

The legislation that went into effect in December of 2020 is important to brokers, agents, advisors as well as employers and their employees. Transparency in the health insurance industry like this allows employers to get one step closer to getting important data they need to make the right choices.

The benefits of listening to your people is evident when we look at Coca-Cola’s decision to rebrand. Back in 1985, Coca-Cola decided to release a reformulated coke which became known as New Coke. However, the public rejected this formula. Coca-Cola listened to the people and within months, they rebranded to the popular Coca-Cola Classic and were rewarded by surpassing their competitor, Pepsi. 

With new COVID variants emerging, the workplace is changing again and as leaders, we need to listen to our employees. Coca-Cola came out on top because they listened to the people who mattered, and right now, our people matter. Our employees are adapting and coping to the new variants and repeated waves of the Coronavirus in their own way, which means a one-size fits all approach of leadership won’t work.

I have an employee who is very concerned about new variants of the virus. She is most comfortable wearing her mask at all times in the office and uses the protection of plastic shields around her desk. She designed and placed the shields on her own accord, doing what she feels is necessary to protect herself.

These extra precautions are important to this employee because they allow her to feel safe while at the office so she can continue to be a valuable member of the team. As leaders, we need to assess our workplace and determine what we need to do to protect the safety of our people and if there are employees that require more, we need to adapt to those requests.

Not all employees share the same concerns, however, and we need to make sure we are addressing everyone equally.

Understand your people

With the politics, media and our own logic and beliefs surrounding the pandemic we are going to see a natural division between those that are concerned about COVID and those who may not believe in it at all. As leaders we need to balance these opinions and navigate those beliefs. If we can lead with respect, our people will interact with respect too.

By listening to concerns and supporting our employees’ individual concerns we can begin to move forward and create a safe and comfortable environment that works with everyone’s beliefs. Allowing some employees to use extra protective measures certainly doesn’t affect the functionality, safety or productivity of the business and allowing others to be physically distanced in a collaborative environment doesn’t either.

In fact, by allowing our people to feel safe we emphasize our culture. 

We are the first employers to lead companies through this global pandemic and perhaps now more than ever, we need to lead by listening. By having conversations and listening to our employees we open the doors to a happier, more loyal workforce, which paves the way to increased productivity and better retention. If our culture is about our people, we open doors to more employees, eager to be a part of the team.

Ask the right questions

The very nature of leadership involves guiding and motivating your team and should include appreciation, empathy and flexibility. As leaders, there are several questions you can ask yourself to ensure you are meeting these requirements, such as:

1. Who are you listening to? 
2. What have I done to show I am listening?
3. In what way am I leading? Do I lead with a dictatorial style, a democratic style, an affiliate style?
4. What effects do the decisions I make have on the team?
5. Am I listening to everyone?

Make the needed changes

As leaders, knowing what our employees need and want is unlikely unless we ask them directly, obtain feedback and take their opinions into consideration. This doesn’t necessarily mean making big changes to your benefits program, it could be something as simple as providing free COVID-19 testing within the company.

Or even allowing an employee to surround her desk with plastic shower curtains.

Coca-Cola’s leaders didn’t hesitate to listen to the public and quickly brought back their original recipe, even though they had spent a considerable amount of time and money formulating New Coke. Sometimes as leaders our decisions are not always right for the company and we need to be flexible and prepared to make necessary changes. 

One of our most important responsibilities as a leader is maintaining an environment where all employees feel valued. Leadership is about encouraging our people to grow and excel while ensuring the organization’s values and visions are met. 

In other words, leadership is about inspiring and motivating people to reach a common goal. 

In the last decade, while the definition of leadership has stayed the same, our perception of leadership has changed. Now, leadership is considered a skill, one that can be actively refined and improved. Learning how to adapt your leadership skills to fit a diverse workforce in ways of age, ethnicity, gender, background, and motivational style is important for you and your company’s long term success. 

This gradual transition in the way we view leadership could be fueled by the addition of a younger generation entering the workforce, adding to the already diverse nature of companies today. As a leader, our job is to understand how each employee works, how they feel and how we can provide the tools they need to succeed.

People, Culture and Vision

One style of leadership cannot fit every employee. Following a strict protocol for all employees could lead to failing a large portion of the team, especially the younger members who are known to have a greater desire for self-direction and dexterity within the workplace. Where millennials may thrive on feedback and mentorship opportunities, a baby boomer may prefer to converse only when there is a clear problem.

Uniting your employees’ perspectives and listening to their individual opinions will help communicate that they are important to the company’s success, no matter what the hierarchy order is. After all, teamwork is a collaborative effort, each group member contributing ideas and knowledge.

We can relate this concept to a bakery. A customer places an order for a cake, as a leader you show your employees the recipe and the team is responsible for baking the cake. The customer only cares about the taste, not how many steps or ideas were generated while baking the cake. In fact, if team members feel able to contribute equally, deciding who is responsible for each ingredient and each piece of equipment, the cake could be baked more efficiently.

Learn, Adapt and Change

For leaders of large companies, reaching all employees personally can be challenging. In these cases, your leadership needs to empower your direct reports to maintain consistency across the organization, ensuring that all employees are heard and treated equally. As the company’s values are passed down the line, trust in the company’s culture is built up, which can improve employee morale and overall job satisfaction.

Good leadership should allow for adaptability to ensure everyone on the team receives the same opportunities.

As the team grows and develops, so should your leadership. Leadership is about continual improvement and growth, the ability of balancing technical enthusiasm from one employee to business experience from another. Learning from our experiences as well as our employees’ experiences, both in life and business. 

Being successful now doesn’t make you successful tomorrow. Tomorrow is a new day and a new environment. Embrace the change life provides and thrive as a successful leader.

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.

A self-funded benefits plan means a business runs their own plan instead of purchasing a traditional fully-insured plan. Though many business owners and leaders have heard of this option, the perceived complexity of the process coupled with a fear of change deters them from fully exploring what’s possible with this approach.

With increased flexibility and greater control of their benefits plans a business can create true cost-saving opportunities as well as improved employee experience and retention. Historically, self-funding has been viewed as something that only large companies can do but with the advancements in predictive tools, this option is available for medium and even small companies. 

The key to implementing self-funding into your business is to understand your business goals, estimate your timeline, and to consider the needs of your employees. The process doesn’t have to happen overnight, either. Each step can be done gradually over time. 

Step 1: Understand Your Goals

Cost-savings is one of the biggest advantages to self-funding benefits plans. However, being self-funded means your company will assume the responsibility of paying for employee claim costs out of pocket. While this can sound intimidating, most businesses engage an advocate or third party administrator to help with analyzing plan data to create a cost-saving plan without sacrificing benefits or quality care for your employees. Additionally, your advisor should put mechanisms in place that safeguard your business if a radical increase in your benefits costs occurs.

In other words, self-funding can be de-risked to maximize your upside.

With risk addressed, self-funding allows freedom of choosing the benefits you offer to your employees, which presents the opportunity to increase employee retention and overall job satisfaction. For example, an industrial company with a large labor force will likely have different needs than a technology company where most employees work remotely. By offering wellness programs and benefits tailored to the needs of your employee population you reduce the number of health insurance claims made each year as well as eliminate the cost of under-utilized programs.

To reach these goals, you need to invest the time, gather and analyze your data (so that you understand your people and how your benefits have been used today). With that data and insight, you can create an appropriate timeline to transition from traditional benefits to a self-funded plan.

Step 2: Explore Employee Data and Engagement

Analyzing your employee’s data is a crucial part of structuring any health insurance plan. By analyzing the data within your plan you gain transparency by having complete access to employee claims (in a HIPPA compliant way, of course). This gives you the historical view of what your plan actually costs, enabling you to see the real value of your current plan.

You may find that you spend far more on premiums than is actually needed for care, but you may also discover that your plan has absorbed significant costs for the businesses and is actually delivering a great value for the business.

Using this data along with predictive and analytic tools can help identify potential areas of concern within your employee population. For example, a combination of health factors could create claims challenges down the road, but by tracking and analyzing the data produced by claims, you can plan for these challenges. For example, analyzing data to detect risks of diabetes amongst a population of employees can help an employer offer solutions to better manage the condition. 

Having the ability to choose your healthcare benefits plans also means you determine which doctors, facilities and hospitals will be included in your plan. Employees may feel intimidated about this aspect of the new plan, but by providing a plan to educate and engage your employees you can ease this worry while actually improving the care they receive. Including information sessions and training courses to your employees is part of making self-funding successful.

Step 3: Identify Your Timeline

Different businesses will begin and complete the transition from fully insured to self-insured at different speeds. Knowing your business’s financial situation can help develop your unique timeline for self-funding. For example, by calculating your expected premium increases over the next several years, you can determine if the amount is feasible to pay. If not, you may need to consider a more aggressive plan, which will implement the self-funding model quickly, but may take more resources early on. 

If done correctly, despite the speed of execution, the move towards self-funding insurance can generate long-term financial gains and overall employee satisfaction for your business. Mapping that timeline will enable you to match the process to your unique needs while eliminating potential obstacles.

Knowing Your Options

The ideal self-funded plan is one that minimizes risk and maximizes your return, one that provides cost savings without giving up the benefits your employees value. To achieve the advantages of self-funding, you need to be willing to break away from traditional insurance providers, to take back the profit they are making from you, and return it to your employees by offering benefits plans that are unique to them. 

You won’t know if you’re making the right choice until you look at all of the options.

Employee benefits can be a complicated endeavor to navigate, especially during the renewal period–a time when employers are faced with a staggering amount of decisions to be made in a very brief decision-making window. The ability to negotiate or even explore alternative options feels rushed because most brokers initiate the renewal process a few weeks before the renewal is due, leaving little time to make adjustments and changes. This can be even more troublesome if you are facing a steep increase in costs.

The reality is that the renewal process should begin months before your renewal date. If left unaddressed for too long, you run the risk of renewing a plan that can leave you overpaying or underinsured.

Update, Quote, Review

When your company’s insurance policy is up for renewal, there are a few steps that need to be completed to ensure you have the best, most cost-effective plan in place for your business. First, your plan needs to be updated to reflect the current needs of your employee population. Perhaps your business has grown and you’ve hired more team members, or there’s been a change in key personnel. In either case, you should be looking at benefits that suit the business today because premiums are sure to increase, and last year’s plan may not provide enough value for the cost.

Next, you should evaluate your plans data to understand how your benefits budget was actually spent. Your broker may resist or defer the request for your data because they say there isn’t enough time or assure you the current policy is ideal. But advisors (like us), have tools to make this information accessible to business owners. This data will help you to understand the real value of your plan and if any major difference in cost—either in your favor or against—are present and worth addressing.

Understanding the Data

To design a benefits plan that meets the needs of your employees in a cost-effective way, you need to understand your data and ask the right questions. Several points to consider when designing your plan are: 

• Enhance your employee benefits. Part of understanding the information your plan has is knowing which benefits are important to your employees and which benefits could be wasted.
• Explore opportunities for cost-savings and experience improvements. For example, prescriptions are a major source of overspending in benefits plans. Alternative sourcing could lower your costs and your employees’ out of pocket expenses for the same prescriptions.
• Look at your trajectory. If you’re seeing consistent annual increases in your premiums, how long can you absorb those costs before it threatens the business? Knowing that timeline can help you gauge how aggressive or conservative you can be in your planning.
• Know your state laws as well as federal laws. Meeting your unique business needs should also mean avoiding being out of compliance for minimums or transparency requirements (which are changing and evolving each year).

As you have probably started to realize, these suggestions come with several follow-up questions and potential considerations, which is why starting this process is so critical. Renewing your business benefits plan is a lengthy process that should begin in a timely manner. Having an advocate available from the beginning can help save time and even unlock doors to potential savings, illuminating blindspots and giving you access to new options.

We’re here when you’re ready.