Budget Mistake Kills Employee Health Plans
Budget Mistake that Kills Employee Health Plans... Separating Claims Costs from Administrative Costs--Both Need to be in the Same Budget.
The Head of Benefits of a Fortune 100 company with 97,000 employees kept his plan's trend flat for multiple years because he ran the plan 'Like a Business.'
Specifically, he was given a budget for Claims AND Administrative Costs (benefits staff, consulting fees, ASO fees, vendor fees, stop loss premiums, etc.) Combined and he had to come in under budget.
Therefore, he could spend more on plan administration to lower the claims because they were not separate... AND his bonus was tied to coming in within that total budget.
Other companies make the mistake of having administrative costs OUTSIDE of the overall plan costs.
That strategy encourages health insurance carriers and vendors make their 'administrative' costs look low and then 'hide' their cost in the claims.
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Пікірлер: 10
I'd love to chat with the person who came up with this as I'd like to apply it to my larger, self funded groups. Excellent (as always).
Always thought-provoking & many implications here. Is there a plausible argument with the CAA where it might be recognized that an employer cannot be said to be adequately upholding their fiduciary responsibility if they aren't taking this approach?
yes very important video and gorw your business and your KZread channel by digital marketer expert
How you keep this passion alive?
It's a balance and yes you have to run it like a business -- but you have to keep your customers happy. Who is the customer? Company Shareholders AND Employees/Members has always been my philosophy. If I can't provide my employees and their families effective and affordable healthcare then I should find a new job! Also if I can't employ cost saving/trend mitigating strategies then I'm not serving my company's shareholders either. Our average healthcare cost is .8% --- since 2015. Only horrible year we had was 2021 --- COVID....