Will You Be Competitive in 2024 or Forfeit the Game?

It's halftime.

No, it's not football season yet, but not a single advisor is sitting on the sidelines just waiting for the first coin toss. They're strategizing, positioning themselves, and preparing to help clients win in the coming year. The health benefits game is no different: We're halfway through the year, and it's time for you, as an advisor, to gear up for the next renewal cycle.

Say goodbye to the annual "set it and forget it" mentality of chucking the freshly signed plan renewal in a drawer to focus on other things until next year. Winning the health benefits game for your clients requires proactive coaching all year round.

Now is the time to help your clients construct a self-funded plan that wins big next year.

Help them get out of running a health plan that is constantly playing defense — it’s time to put an offense on the field. Show them how to use their claims data to charge toward the goal line.

Their company's health plan is often the second or third largest line item in their budget. When the health benefits start hoarding company funds, other growth-promoting investments like travel, innovation, and compensation take a hit. Soon, there's a spending freeze — they’re running the ball in the wrong direction. Don’t let them focus on pinching pennies when dollars are unnecessarily flying out the door.

There is a better way.

Help your clients build a health plan strategy that grabs hold of the ball and then maneuvers around the traditional obstacles that make them feel powerless. Sometimes a single change can score the touchdown that saves hundreds of thousands of dollars instantly. Other plays will get them a few yards at a time, supplying incremental savings that compound over time.

Either way, in big and small chunks, you can guide them to the end zone where employees are cheering because they now have the highest quality of care at the lowest possible price. Even better, they’ll show up for work happier, healthier, more motivated, loyal, and focused.

As you prep your clients for the big win, you'll need to focus on:

• Structuring the winning plan. Recruiting a team of MVPs who will coach your client down the field and execute the plays is essential to their victory.

• Harnessing your client’s data. Their data defines their opponent and loads their playbook with strategies to play the game with excellence and efficiency.

• Taking action. Never take your eye off the ball. A successful game requires continuous oversight. Help your client consistently review their historical and predictive data so they can pivot when necessary to maximize savings and ensure quality healthcare.

As Vince Lombardi said, "The price of success is hard work, dedication to the job at hand, and the determination that whether we win or lose, we have applied the best of ourselves to the task at hand."

If your client is fully insured, let's be honest — they’ve forfeited the game. They handed over the win to the carrier.

Transitioning to a self-funded plan will take work and dedication, but there’s no need to reinvent the wheel. Many have blazed the trail. Proven, streamlined strategies and partners are ready and waiting for you and your client. They will help structure the plan, access and analyze the data, and implement an offensive strategy.

Structuring the Winning Plan: Recruit Your Team

Structuring your client’s plan with the right people, the right tools, and the right incentives is key to present and future flexibility. When costs are up, utilization is down. When utilization is down, member health and productivity decline. Help them build a team of partners with the skills to achieve higher quality care at a lower cost, increasing utilization, improving worker performance, and boosting the company's bottom line.

The Coach, a.k.a. The Advisor

That’s you.

The current healthcare system in the U.S. is a shutout for employers and members. In 2022, employer-sponsored health plans experienced the highest annual increase in cost per employee since 2010.

Only carriers and their shareholders are winning.

Despite the annual spanking fully insured plans take at renewal time, far too many employers are intimidated by the transition to a self-funded plan. Meanwhile, financially crippling out-of-pocket costs are hurting employee retention and new talent recruitment. Many employers have already taken action: 61% of U.S. companies now offer self-funded health insurance.

Help your client catch the wave or risk being left holding the ball.

Your role as their advisor is to guide and execute strategies unique to their member population.

There’s no one-size-fits-all plan anymore. Structuring a customized plan based on population-specific data reduces waste.

When it comes to your role, compensation transparency is essential. Ask yourself:

• If you’re compensated by the carrier, where’s the motivation to save the employer money and improve benefits?

• When your commission is a percentage of the renewal, and your bonuses depend on client retention, where does your loyalty lie?

Compensation transparency is so crucial to a winning formula that the Consolidated Appropriations Act (CAA) of 2021 requires carriers to disclose:

• The amount of compensation paid to the advisor.

• An easily understandable description of the services provided.

• Any other earnings received from the carrier, including bonuses or incentives.

This legislation empowers you and your clients to build a winning team.

The Quarterback, a.k.a. The Third-Party Administrator and Pharmacy Benefit Manager

Employers' most significant hurdle is "Who'll ensure employees won’t ‘rush the field’?"

The third-party administrator (TPA) and pharmacy benefits manager (PBM) serve as the hub for all partnerships, services, and tools to save money while providing the highest quality medical and prescription drug services.

The TPA partners with you and your client to:

• Establish direct primary care

• Process claims

• Manage enrollment and eligibility

• Handle direct contracting

• Bundle services for episodic care

• Provide customer service and other administrative tasks

The PBM handles all things prescription drug benefits, including:

• Mail-order pharmacy services

• Manufacturer assistance programs

• International pharmacy opportunities

• Specialty pharmacy savings

The key? Make sure TPAs and PBMs operate on administrative fees only—not commissions—to align incentives properly.

The Defensive Line, a.k.a. Claims Integrity

The defensive line is critical because fraud, waste, and abuse in medical and pharmacy claims are rampant.

Claims integrity companies analyze data to detect irregularities and prevent errors and fraudulent billing practices. These partners provide significant cost savings and are usually compensated by a share of the savings they generate.

Harnessing Your Data: Study Your Opponent

Without the data, you've got nothing.

Your client needs the data to know which play to run and how to outmaneuver inflated costs and unnecessary claims. Debbie Ashford, North America chief actuary for health solutions at Aon, reminds us that 1% of members often drive 40% of healthcare spend.

Help your client:

• Analyze utilization patterns

• Evaluate program performance

• Dig deep into prescription drug trends

• Prepare for negotiations

• Target specific populations with tailored programs

This is how you turn insights into wins.

Taking Action: Draft Your Team, Review the Stats, Drive the Ball

Here's the step-by-step plan you and your client need:

1. Adopt a long-haul mindset.

2. Structure the team with aligned incentives.

3. Get the data, huddle the team, and execute plays.

4. Incentivize the behaviors you want to encourage and disincentivize the ones you don’t.

Communication is critical. Employees must understand how to access and benefit from the system.

If they want zero out-of-pocket expenses, incentivize high-value care.

Educate them to seek the highest quality doctors for the best price — even if it means driving a few extra miles.

Discourage low-value care with appropriate out-of-pocket costs.

This Is Your Super Bowl

Are you going to help your client compete in 2024?

Success requires a well-structured plan, the right team, and the right incentives.

The health benefits game is win or lose. When employees win, the employer and the advisor win, too. Far too many employees are losing because their employer is stuck playing defense and forfeiting to the carrier.

The "perk-cession" is real. Benefits are dwindling. Employees are stressed.

• Two-thirds of workers are worried about affording healthcare.

• The average family premium has increased by 55% since 2010.

• Most employees believe their benefits are unaffordable, while most employers believe they are.

Who’s right?

It’s time to help your client stop playing defense and step into the offensive strategy that wins the game.

You’ve got the playbook. Your client has the team. All that’s left is to run the play.

Resources:

• ¹ Holdsworth, Z. (2022, November 11). 3 Strategies To Help Companies Reduce Healthcare Costs And Better Manage Benefits. Forbes. C., MBA (2020, September 22). How to Make Rx Drug Manufacturer Incentives Work for Pharmacy Benefits Plans. Rx Benefits. https://www.forbes.com/sites/forbesbusinesscouncil/2022/11/11/3-strategies-to-help-companies-reduce-healthcare-costs-and-better-manage-benefits/?sh=54229393c27
• ²Health Payer Intelligence. (2021, September 28). 4 Employer Health Benefit Strategies That Lower Healthcare Costs.  https://healthpayerintelligence.com/news/4-employer-health-benefit-strategies-that-lower-healthcare-costs
• ³2020 Employer Health Benefits Survey - Section 1: Cost of Health Insurance. (2021, March 17). KFF.  https://www.kff.org/report-section/ehbs-2020-section-1-cost-of-health-insurance/
• ⁴Japinga, M., McClellan, M., Saunders, R., Zhu, M., Mendelson, D., Thurston, B., Alley, D., & Duke Margolis Center for Health Policy. (2021). A Pathway for Coordinated, Affordable Employer-Sponsored Health Care. https://healthpolicy.duke.edu/sites/default/files/2021-09/Pathway%20for%20Coordinated%2C%20Affordable%20Employer-Sponsored%20Health%20Care..pdf..
• ⁵Ario, J., Finkelstein, A., & DiBello, J. (2021). The Episode-based Benefit Plan Promoting Episode-based Provider Payment Through Employee Health Benefit Design. https://www.manatt.com/Manatt/media/Documents/Articles/Signify-Episode-of-Care-Plan-Benefit-Design-September-2021_b.pdf
• ⁶Most workers want employers to help them prepare for health care costs | BenefitsPRO. (2023, April 4). BenefitsPRO. https://www.benefitspro.com/2023/04/03/most-workers-want-employers-to-help-them-prepare-for-health-care-costs/
• ⁷The future of employer-sponsored health care: strategic responses and cost containment opportunities | BenefitsPRO. https://www.benefitspro.com/2023/04/21/the-future-of-employer-sponsored-health-care-strategic-responses-and-cost-containment-opportunities/
•  https://aon.mediaroom.com/2022-08-18-Aon-U-S-Employer-Health-Care-Costs-Projected-to-Increase-6-5-Percent-Next-Year
• ⁹Cuadra, D. (2023, April 4). Are employers picking affordable healthcare benefits? Employee Benefit News. https://www.benefitnews.com/news/are-employers-picking-affordable-healthcare-benefits
• ¹⁰Text - H.R.133 - 116th Congress (2019-2020): Consolidated Appropriations Act, 2021. (2020, December 27). https://www.congress.gov/bill/116th-congress/house-bill/133/text.