Some employer groups (employers) are fortunate to have brokers, consultants or Third Party Administrators (TPA) that represent their financial interests. These producers understand the employer’s “bottom line” to their clients and do not act as an insurance coverage facilitator or placement service. And with the proper risk management strategies in place, the employer may take more risk by increasing their specific deductible and/or the aggregate. Ultimately, these changes will also help lower the premium.
It’s completely understandable to want the lowest price after experiencing revenue reductions due to the pandemic, rising medical costs, increase cost of gas and now inflation. However, should the lowest upfront savings be the barometer in purchasing your insurance? Hopefully, the answer is “no,” because there are a number of variables that can significantly influence your year over year premium cost. From a policyholder’s (employer’s) perspective it’s best to evaluate your insurance needs and strategy from the claims perspective first, then coverage, and lastly cost.
Why claims first? Because successful risk management strategies translates to lower claims cost, which equates less dollars spent by the employer and ultimately, lower premiums. In our opinion, one of the key strategic components of any good risk management practice is to ensure that all parties involved (producer, third party administrator, stop loss carrier, cost containment vendors, pharmacy benefit managers, etc.) share the same common objective – to provide the employer with the best possible outcome. Like many industries, some parties may be incentivized financially to use a certain business partner. This may not necessarily be a bad thing, providing the outcome is the best possible for the employer. For the record, USBenefits Insurance Services (USBenefits) does not accept financial incentives from business partners, but rather passes all the savings to your client.
USBenefit is proud to share that we save our customers money. In fact, some of our producers have requested to use our resources to help expedite the Claims audit process and improve the Claims outcome. We also collaborate very closely with third party administrators who have a record of successful outcomes.
For example, if you elected to purchase a stop loss policy where the cost was 10% less than USBenefits, however in the end, your claims may have ended up 15% better with USBenefits than the other stop loss carrier. This savings also impacts the bottom line for your current policy period. Again, it’s the claims outcomes that will influence your future premiums. Below are several examples of USBenefits Claim successes:
Our savings measurement starts with evaluating the Amount Saved vs Claim Paid and lastly, the savings of Claims Paid to Premium. Based on USBenefits’ 2020 experience, our percentage of savings are 30.6% and 23.3% respectively for the 2020 treaty year. The latter figure can serve as a good assessment if your current partners and/or strategies are achieving your objectives.
Ideally, the employer’s healthcare cost will not be completely subject to the pricing pressures from vendors, medical networks and/or insurance market cycles. That is, over time their risk management strategies will increase the predictability of the potential annual losses and avoid the insurance cost peaks and valleys.
Our motto is “Your goal is our goal – to provide the best possible outcome for the employer.”