Whether groups are large or midsize, there are several things they need to fully understand. They need to understand how those things are going to impact their company and what they need to consider for 2014. One would be a value-based employee benefits plan, which is an incentive type of plan with which employees’ benefits change based on their participation in an annual physical, for example, or completing a health risk assessment. There are definitely some creative ways to offer these value-based benefits. Companies can define contributions as well as offer several different options such as buy-ups or buy-downs, health maintenance organizations, high deductible plans and low deductible plans. These options give employers an opportunity to control costs. An example of how options can work is that the employer may give $1,500 and provide a list of different plans from which employees can choose using those dollars to purchase coverage. This approach works not only for the medical, but also dental, vision and maybe buying up on disability coverage. It is a whole different way of looking at benefits and allowing the employer to control costs instead of letting the carrier control them.
Alternative funding, or partial self-funding, is also something that all employers should consider regardless of size. It can be offered to small group, but a lot of small group companies feel that it is something they cannot do. The thought of self-funding may seem scary to small group companies, but it is definitely something that can be done.
It is important to call it partial self-funding because there is some insurance that is there. Again, partial self-funding is another opportunity for employers to control costs and avoid some of the health care reform taxes that are out there like the premium taxes and the additional health care provider tax. It is definitely important for employers to look at partial self-funding to see if it is something that is a fit for their organizations.