If 2020 has taught us anything, it is to be prepared. Businesses of all shapes and sizes have been hit hard by this past year’s events and need flexible benefit brokers with a portfolio of products to adapt to their new normal. By combining insurance options, voluntary benefits, and non-insurance alternatives, brokers can step out of the major medical box to deliver a customized health plan to their diverse clients—distinguishing themselves from their competition. Partnerships with pioneering third-party administrators, insurance organizations, and health care memberships allow brokers to listen to their clients’ pain points, then deliver a tailored solution that meets their needs.
Partnering with a Third-Party Administrator
Most benefits providers have the same goal in mind: connecting people to exceptional healthcare. A third-party administrator (TPA) is a powerful ally when designing an effective and easy-to-use health plan.
A TPA can blend different carriers to build a variety of healthcare products. Each product in the plan can stand on its own, but like a biochemist, a third-party administrator understands the synergy of combining products to provide the best options for clients and make sales and marketing easier for brokers.
Employers enjoy the simplicity of having one payroll deduction per employee for all their healthcare products. The administration is what TPAs do, so they can quickly relieve an employer of the burdens of payment processing, compliance issues, and other nuances that can get complicated if you’re not well-versed.
Challenges of the Current Landscape
Every person, regardless of age, gender, or socioeconomic background, needs healthcare. Research shows people who utilize a primary care physician have 33 percent lower annual adjusted health care expenditures and lower adjusted mortality rates than those who don’t.1
The challenge is providing primary care and other health benefits that are affordable and easily accessible to everyone. Small businesses too often feel they can’t offer benefits.
Unfortunately, the cost of health insurance is continually increasing. Some employers are forced to pass healthcare costs onto employees in the form of high deductible health plans (HDHPs) to combat rising premiums. While an HDHP may offer premium services, some employees can’t afford to meet the deductible before health coverage begins, making the benefits unusable.
Whether offering a MEC or HDHP, employers also struggle to manage health plans’ costs due to insurance claims. These unpredictable claims are the wildcard of any benefits package, and many employers are uncomfortable with that level of exposure. They’re looking for brokers who can offer solutions to mitigate these costs.
Synergy Contains Costs
One way to contain an employer’s healthcare expenses is to combine MEC and HDHP insurance options with a no-claims option like direct primary care (DPC). DPC is a healthcare membership that differs from insurance because there are no premiums or deductibles to meet. There are no claims to process or impact the employer’s bottom line later.
Facility operators encourage physicians who work in their network to push patients toward specialist care and facility tests and evaluations, because that’s where they generate the most revenue. This practice is terrible news for employers when those large claims come in.
In contrast, direct primary care seeks to keep employees healthy so that they won’t need specialized care in the long run. DPC members pay a low monthly membership fee for unlimited access to a primary care provider. Most providers offer telehealth services and virtual visits as well—a game-changer over the last year. Utilizing primary care as recommended keeps health from deteriorating into more costly disease states or conditions that may require specialized care, such as surgery.
Should a catastrophic event or accident occur, a DPC member could still engage their HDHP or other insurance at that time. But for routine family care, direct primary care softens the blow for employees and employers.
Negotiating Better Rates with Other Carriers
Putting direct primary care into a health plan also directly affects the aggregate rate for stop-loss insurance. Stop-loss carriers know that adding DPC to a health plan offsets claims, so they offer reduced fees for companies who incorporate it. This practice is another cost reduction just for adding a direct primary care product with other insurance alternatives.
Also, health shares offer substantially discounted rates to employers who provide DPC as well. Those savings alone could cover the direct primary care cost in the health plan while also shielding the plan from shareable expenses.
Partnering to Provide Solutions for Associations
Health plans for associations ended with the ACA. This issue left a severe void in healthcare for professionals. There aren’t many low-cost solutions in all 50 states, but direct primary care is one.
Sometimes forgotten by brokers, there are still many associations that want to provide benefits to members in every state, but they don’t know how to do it. A savvy broker partnered with the right TPA can help fill the void for these organizations who may not understand the benefits of a product like DPC or other offerings that can work alongside it.
A Shift is Happening
There was a time when everyone wanted a Blue Cross Blue Shield plan, but brokers noticed a significant shift happening. Consumers say these products are expensive, and they also don’t always provide the best coverage. Feeling there must be a better way, many clients are looking for more cost-effective alternatives like DPC to blend into health plans. The 2020 Large Employers Health Care Strategy and Plan Design Survey confirmed that implementing advanced primary care strategies is an emerging trend among employers for 2021.
Employees want healthcare they can afford to use, and employers want to provide benefits that won’t wreak havoc on their profits. By leveraging the power of partnerships, a new breed of benefit brokers offers health plans that are both affordable and robust.
1 Franks P, Fiscella K. Primary care physicians and specialists as personal physicians. Health care expenditures and mortality experience. J Fam Pract. 1998 Aug;47(2):105-9. PMID: 9722797.
