By educating your employees in certain aspects of health care, they can become better consumers and advocates. 

Controlling Prescription Drug (Rx) Costs 

What are brand-name medications versus generic medications? Generic medications can cost up to 85% less than their brand-name equivalent. Generic drugs are heavily regulated and go through a rigorous review process before they’re approved. The FDA tests them to make sure they offer the same benefits as brand-name medications. In studies, it has been shown that 87% of the time, the generic medication was equally as effective as its brand-name equivalent. 

Outpatient Imaging or Testing Costs

The cost of outpatient imaging or testing can vary significantly depending on where the test is completed. The most expensive testing is typically in an outpatient setting at a hospital. This is an area where most people decide to have their imaging or testing done where their doctor writes the order. If the imaging is done at a hospital, the cost can be anywhere from two to three times the cost of what it would cost at a stand-alone imaging center! It is critical that employees make sure they do some investigation up front prior to having imaging or testing done. Most stand-alone imaging centers can either send your results to your doctor or provide them directly to you. 

Consider Offering an HSA (Health Savings Account) As Your Low-Cost Plan

HSA plans or consumer-driven health plans are a great way to engage your employees in understanding the costs of health care and driving their consumer behavior to save money on health care expenses. Employees who participate in HSA plans are more likely to be cost-effective when spending health care dollars. This can keep your overall claims costs down and have an impact on better rate stability. 

Level-Funded vs. Self-Insured

If your medical loss ratio is in the 80s or below, a level-funded medical program may provide additional savings in the form of a potential surplus. Employers with more than 100 employees enrolled in your medical program may find a self-insured program to be beneficial, especially if your loss ratios are below 90%. 

Important Underwriting Factors in Group Health Insurance

Participation is a very important factor in underwriting health insurance. No matter the size of an employer, participation in your health plan is extremely important. It is important to keep your participation in your group health plan as high as possible and not allow it to go under 50% of total employees or 75% of eligible employees, not including those with a valid waiver. If your participation drops below these levels, then most insurance companies will add a participation load to your rates. Some insurers may not provide a health quote for employers under these participation levels. 

It is not to your advantage to switch health insurance companies too often. One of the questions underwriters will ask is how many insurance companies you have been with for the past five years. Two is OK, but more than two may limit who will provide a quote or how competitive a quote you receive. 

Employer Contribution plays a vital role in your rates. Our analysis of benefit clients shows that those who contribute more toward “employee only” for health insurance have a higher participation, which helps keep overall rates down. 

Telehealth benefits and overall benefit education can play a major role in keeping claims costs down and impacting lower medical loss rates!

Make sure your broker takes a proactive role in your medical renewal. The insurance company may not be aware that a high claimant is no longer part of your group. These things can impact your ability to negotiate your renewal. 

Did You Know?

Did you know that GADA has an in-house insurance agency that specializes in employee benefits? We would be happy to discuss your employee benefit challenges to see if we can provide better solutions. Our goal is to provide the most competitive costs, top customer service and keep our benefit clients informed. We have clients with fully insured, level-funded and self-insured medical insurance programs.