3 self-insuring tools for brokers
Check out this column in BenefitsPro:
Alternate funding strategies are becoming more attractive and accessible for groups of all sizes. As health care costs reach a crisis point, employer interest in these alternative approaches is on the rise. This shift is also driving carriers, vendors and other third parties to see opportunity in this market and work with groups smaller than they traditionally would have.
As a result, brokers are increasingly recognizing the need to provide advice and assistance around transitioning away from fully-insured plans. But this takes some planning, as these strategies represent a significant transition for clients and prospects.
In the current slow season before open enrollment, benefits professionals can take stock of their strategy for the coming year, and consider how they can best serve the changing needs of clients and prospects in their market.
Here are three things brokers need in their self-funding “toolbox.”
Though benefits has historically lagged behind other industries when it comes to technology, this has changed over the last several years. There are more tools than ever before to streamline the benefits experience, from health forms to enrollment and more.
Health form software in particular will help brokers win new business by making it easier to offer cutting-edge benefits strategies.
The burdensome questionnaire process can often disincentivize brokers and employers alike from pursuing self-funding, even if it’s the most cost-effective strategy. Solutions have been limited in this space, but there are new, modern options that make this process easier for employees to complete and brokers to manage.
Brokers will need to make recommendations to clients and prospects for services providers including third-party administrators (TPAs), reinsurance or stop-loss carriers and provider networks.
While many of these vendors traditionally either did not work with small or mid-sized groups, or did not provide solutions that made sense for this market, this has begun to change as service providers recognize the opportunity to compete against unsustainable rate increases under the fully-insured model.
For example, it’s now possible to avoid lasering employees, and there are specific employee deductibles as low as $25,000. Some TPAs and reinsurance carriers will work with groups as small as 15 employees, which means most employers will benefit from at least considering their options for self-insurance.
If you haven’t reviewed self-insuring service providers recently, this is a good place to start.
A motivated prospect
That said, as important as technology and good vendor relationships are, the key component in moving groups toward self-funding is decision-maker motivation.
The leadership team will need to be motivated to save money, and brokers know that this can often be a harder sell than it seems like it should be.
To find a motivated prospect, first look for an ideal group — the characteristics of an ideal small group to move to self-insuring can be different from one market to another.
Next, get really clear about who at the organization is the decision-maker. The owner may not have been involved in benefits for a decade, but self-funding represents a transition, and they may need to be involved.
Ask directly: “Is there anyone else we need to give a heads up to?” This allows you to get the decision-maker at the table with you, and minimizes the risk of presenting a really good option that is ultimately vetoed at the last minute by a decision-maker who was not included in the discussion from the beginning.
Finally, clearly communicate the savings opportunity. A good question to ask is “If we had all the work done, and we saved 15 percent, would you do this? What about 10 percent? At what point would you not go for these savings?”
These questions will help you have the right conversation with the right people at the organization, and hopefully motivate the prospect to make the transition. With technology and good vendor relationships, you can also make that process as easy as possible.
Preparing these tools now will give you a competitive differentiator while prospecting and allow you to build your book of business prior to open enrollment.
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