Thanks to ever-evolving health care reform regulations, you have another opportunity to help your small group clients reevaluate their employee benefits strategies. Since the ACA has redefined “small group employer” to include groups with 51-100 members, all fully insured small groups will be subject to community-rated underwriting as of January 1, 2016. Your clients experiencing the status change are likely to see their premiums increase significantly, putting their commitment to offering healthcare coverage to the test.
It’s the perfect time to embrace the level funded health plan, a hybrid product offering the advantages of self-funding with the look and feel of a fully insured plan. It features fixed monthly payments and simple plan design and administration, plus the potential for financial gains. Take these steps to get up to speed with this marketplace opportunity so you can start selling:
Step 1: Redefine Your Definition of Self-Insurance
Self-funding has traditionally been an option best suited for large employers with the resources to assume their own risk and manage the intricacies of claims administration. Yet level funded products have built-in safeguards that are particularly attractive to small business owners:
- If claims exceed expectations, the employer can tap into stop-loss insurance.
- If claims come in below what’s expected, leftover funds can be refunded or rolled over into next year’s claims account.
This means employers don’t need to pre-fund a claims account or hire an HR specialist to focus on claims accounting—two barriers to small group self-funding that are now off the table.
Step 2: Identify Likely Candidates
Brokers who work with larger employers are starting to move down-market, leveraging their expertise in self-funding to write more business with smaller employers now that they have a product they can use. And brokers who specialize in the small group space are scrambling for something new and different to talk to their clients about.
With level funded products in your portfolio, you can expand your client base to include small groups in need of an affordable alternative to offering a fully insured plan or sending their employees to public insurance exchanges. Search your book of business for small employers with a track record in the fully insured market. Business owners who have seen their rates increase—but understand the marketplace and see the value in offering group health benefits—are likely to respond to a new approach.
Step 3: Align with an Experienced Partner
Level funding might be a new concept for you, so take advantage of partner resources and marketplace expertise. A company with access to multiple carriers can help you find a level funded plan that meets each client’s plan design needs while working with their group’s unique underwriting profile. Call HealthPlan Services you Benefits Hub today at 1-800-545-6441 to learn more about level funded health plans or for help assessing a client or prospect for the right fit.