Group Health Captives - Minimizing the Cost of Group Health Insurance

Employers manage risk in almost every aspect of their business, but often neglect to manage their health insurance risk. For many employers, health insurance has become their highest expense after payroll.

The cost of health insurance has increased 119% in the past 9 years. To manage this risk, employers have changed health insurance carriers, raised copays, deductibles, and passed much of the premium increase to their employees. For the most past, these solutions are “Band-Aids” and this cost increase has become unsustainable and many employers are looking for a better approach.

I can promise you that I am not suggesting that there is a magic wand that will slash your health insurance rates. What I am suggesting is that there is a financial instrument available called a Group Health Captive which gives mid-sized employers (50-500 employees) a terrific opportunity to take control and significantly reduce this very large expense. The purpose of a Group Health Captive is to eliminate insurance carrier underwriting profit and minimize costs. When combined with utilizing proven risk reduction strategies, this approach offers substantial short-term and long-term savings for employees and employers. By pooling employers, the Captive enjoys preferential buying power.

Believe it or not, there are many employers who have implemented such proven risk reduction strategies with tremendous success, often resulting in renewal rates under 3%. Safeway, for example, has achieved noteworthy medical plan savings. Safeway has experienced flat claims the past 4 years, while nationally rates have increased 38% in that same period of time. In addition, the percentage of Safeway’s employee’s who are obese and/or smoke is now 70% of the national average. Point is, there are several proven tools and techniques that empower (and incent) employees to better manage their health. The result … a healthier workforce, a more productive workforce, and significantly lower health insurance premiums.

Did you know?

Did you know that 7% of adults in the US are diabetic?
Did you know that 26% of adults in the US are pre-diabetic?
Did you know that 67% of American adults are either overweight or obese?
Did you know that 24% of Americans are smokers?
Did you know that 5-10% of employees can incur 50% of your company’s claims?
Did you know that 70% of the claims insurance carriers pay are the result of preventable and modifiable conditions … lifestyle choices?

On average, smokers spend $1400 per year in healthcare expenses more than non-smokers. This is a very expensive lifestyle choice. Should smokers pay the same rates as non-smokers? Should bad drivers pay the same car insurance premium as good drivers?

If an employer is serious about lowering their health insurance costs, it is important to create a culture of good health and promote personal responsibility. Is your company doing anything to help prevent your “at risk” employees from developing chronic conditions. It is clearly a lot less expensive preventing diabetes from occurring than treating diabetes the rest of one’s life.

Your company may have reasonable health insurance rates now, but do you know how many “ticking time bombs” exist in your group? If so, how is this data measured from year to year? An effective program is able to identify employees who are “high risk” and employees who have the potential to become “high risk”. Nurse Outreach, Education, and Incentives are in place to help these employees better manage their health.

We are promoting a Group Health Captive program that is not just a Benefits Plan, it’s a Business Model.

Financial Opportunities

Underwriting profits belong to the EMPLOYER rather than the INSURANCE COMPANY.
Reserves belong to the EMPLOYER rather than the INSURANCE COMPANY.
Investment Income belongs to the EMPLOYER rather than the INSURANCE COMPANY.
Prescription Rebates Belong to the EMPLOYER rather than the INSURANCE COMPANY.

I feel that our Group Health Captive model is far superior to your current approach. I am confident that we can save you money, encourage a healthier lifestyle, and save you and your employees a significant amount of money going forward. Though savings are not guaranteed, based on research and track record, we anticipate a savings of 10%-20% in year 1 and greater savings going forward.

Our Group Health Captive only accepts “like-minded” employers who are willing to implement our Wellness Initiative. If your company is accepted into the Group Health Captive, you will be able to offer your employees any type of PPO coverage. We have access to over 200 PPO networks , so our model is ideal for employers with multi-state employees.

Going forward you will have a healthier workforce, a more productive workforce, and pay significantly less for health insurance.

Gary Becker is the President of Becker Benefit Group, Inc., specializing in employee benefit solutions for the mid-sized employers. Becker Benefit Group is a forward-thinking employee benefit insurance agency that has established one of the first Group Health Captives in the country.

Gary C. Becker, President
Becker Benefit Group, Inc.
11000 Owings Mills Boulevard, Suite 6A
Owings Mills, MD 21117
Bus: 888-502-8800
gary@beckerbenefit.com
www.beckerbenefit.com

Group Captives for Medical Benefits, Savings and Profits for Mid-Sized Employers. Call me for information.