Volume 18

TOPThe Independence Issue   

Even though we conduct business all across the nation, at HealthSure our hearts (and head office) will always be in Texas. Since first declaring independence in March of 1836, Texas has been regarded as a wellspring of independent thinking and self-reliance. It is in this spirit that we are proud to present this issue of HealthSure Headlines.

 

In This Issue

Lunch is served! The HealthSure team had a blast preparing lunch for the Ronald McDonald House Charities of Central Texas. Find out how you can get involved.

 

 

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It’s your money, why give it away?
By Barry Couch, CIC, ARM
When it comes to self-insurance, many senior decision makers in healthcare organizations only think of it as a means to fund employee benefit programs. This leaves many opportunities for self-insurance in other areas of risk management unappreciated and underutilized.

 

But usually signals more hat than cattle
By Brant Couch, CPA, CIC
 
Some carriers and larger brokerage firms are sending messages that could give their clients a false sense of security about compliance. Because these brokers and carriers are pounding their chests saying, “We’ve got you covered,” clients are simply sticking their heads in the sand. Both are bad ideas.
New options mean it’s time to revisit self-funded health plans?
By Jill Armstrong, Account Executive, Employee Benefits
 
The promise of lower healthcare premiums has yet to materialize. Instead, they continue to rise. According to a study by the Henry J. Kaiser Family foundation, the average annual premium in 2014 for employer-sponsored coverage was $16,834 for families and $6,025 for single coverage.
HealthSure News
HealthSure welcomes David Hampton to the team
The HealthSure team continues to grow and we are pleased to welcome David Hampton as our newest account executive.

takethemoney
Take the money and run
It’s your money, why give it away?
By Barry Couch, CIC, ARM
When it comes to self-insurance, many senior decision makers in healthcare organizations only think of it as a means to fund employee benefit programs. This leaves many opportunities for self-insurance in other areas of risk management unappreciated and underutilized.

 

For example, paying annual premiums to a carrier to rent your professional and public liability insurance (commonly known as being fully-insured) continues to be standard operating procedure for most. Perhaps the main reason most people do not explore alternative funding strategies, as a replacement for liability insurance, is its ready availability and relative affordability. (Relative at least to the dramatic rate increases seen in health insurance.)

 

Pay rent or build equity?
Since it’s affordable and easy to acquire, why would anyone wish to seek an alternative? Well, in this case, a little independent-mindedness could go a long way.
Anyone who is committed to leaving no stone unturned in their search for new ways to control costs recognizes that premiums paid for liability insurance are a material expense. It’s money you’ve spent and there is no opportunity of ever getting your money back.

While there are several alternative ways to self-insure liability risk, if well managed, each method can result in significant long-term savings for your organization. Simply said, if you don’t incur claims, you get to keep the money you’ve set aside for potential losses.
Reducing your dependence on insurance gives you more control over the disposition and the use of money available to pay claims. Think of buying commercial insurance as renting it year-to-year. Think of self-insurance as an opportunity to build equity over the long term.

 

Whose skin is in the game?
When choosing between investing in an insurance company (by renting their insurance) and investing in your own organization, there are more benefits than money to consider. Self-insurance strategies can have a substantive, positive influence on the actions and roles of employees and other stakeholders.
It’s a matter of human nature; when it is your money, not the insurance company’s, when you have skin in the game, you tend to pay closer attention to what happens. For instance, how you treat patients and ensure service quality, and how you manage other factors influencing the amount of risk your organization is exposed to, come into sharper relief.
Replacing the “remedy” of insurance with a this-is-our-money preventative attitude, causes you to take asset protection to a new, higher level. This attitude creates a powerful context for additional conversations with care givers about taking more responsibility and eliminating even the smallest potential of someone thinking, “Oh it doesn’t matter… we’ve got insurance.” Having to answer “Are we ready to manage a claim?” automatically drives the maturity of your organization to a new level.

 

Wait, there’s more
The skin-in-the-game concept extends beyond your organization when you implement a self-insurance strategy. Instead of leaving the claims settlement process up to the insurance company and its lawyers, and instead of hoping they do their best to prevent an increase in your premiums, you have more control of the claims process and a role in deciding whether to fight or settle.
When your community knows your organization is self-insured, there is a tendency for complaints and incidents to simply go away. (This is particularly true for non-profit community hospitals.) When an attorney knows there is no big insurance company backing you, they are less likely to invest as much time and effort in a claim. Patients who are aware of your self-funded strategy may be more likely to think, “This is the community’s money… if I sue the hospital, it is coming out of my community not the big bad insurance company I could care less about.”

 

What am I up to?
You may be wondering why someone who is in the business of selling insurance would be so keen on self-insurance strategies. While it is true the commissions we receive from insurance carriers are greater than fees we collect from our self-insured clients, our only motivation is finding and implementing solutions that help our clients prosper over the long run.
Consider our tag line “Prevent. Protect. Prosper.” Our first priority is to prevent surprises in your boardroom, on your balance sheet and throughout your organization. Anything and everything we can bring to bear to reduce or eliminate the risk you are exposed to is fair game in our books. So be it if short-term income from our self-insured clients is lower, as long as we’ve helped implement the right preventative strategies, we’ve fulfilled our mission.
Protection is our second priority. Simply said, we must help our clients protect themselves from risks that cannot be prevented. In doing so, we look at renting insurance from carriers as just one option. All other options are on the table and it is our job to have an intimate understanding of how they work and when and where to apply them. This deep knowledge coupled with our unmatched focus on the healthcare industry is the formula behind how we make it simple for you to choose the best possible strategies for your healthcare organization.

 

You get to choose…
If you suspect renting insurance may not be the primary solution to your needs, gaining a clear understanding of all the relevant options is a simple next step.
Competing with fully insured programs are other innovative solutions such as risk retention, risk transfer, loss control, risk purchasing groups, owner-controlled insurance programs (wrap-ups), joint insurance funds and self-insured programs.
It is reasonable to expect your board would want to know what options are available to control cost, improve value and enhance benefits in everything your organization does. I recommend you fully explore your options so that you can lead an informed, due diligence approach to achieving long-term prosperity.

 compliancechestpounding
Compliance chest pounding is fun to watch
But usually signals more hat than cattle
By Brant Couch, CPA, CIC

 

Some carriers and larger brokerage firms are sending messages that could give their clients a false sense of security about compliance. Because these brokers and carriers are pounding their chests saying, “We’ve got you covered,” clients are simply sticking their heads in the sand. Both are bad ideas.
And, even though upstarts like Zenefits say that through technology they can handle everything for you, the truth of the matter is everyone involved has to take the compliance bull by the horns. While Zenefits and others do a lot, they do not do it all. The Affordable Care Act has created an environment in which responsibility for compliance must be shared between clients, carriers and brokers.

 

A three-horned bull?
In this situation, a normal bull just doesn’t have enough horns to go around… which is why a three-horned compliance bull is necessary!
Bull horns aside, shared responsibility has long been a powerful HealthSure theme. Our Shared Responsibility Process™ was created in 2010 to help healthcare organizations design, implement and manage benefit programs that create and sustain a culture in which all employees share responsibility for delivering high quality patient care, controlling costs and protecting profit.
Because the rapidly changing regulatory environment is significantly increasing compliance risk, shared responsibility has found a new, additional role to play in ensuring ACA compliance is achieved and sustained.
More than ever, leaders in healthcare organizations have to be independent minded. With independence comes the responsibility to take the lead in ensuring their organization is in compliance. The best way to do this is to grab the compliance bull by the horns. Start by making sure your broker has a firm grip on their shared responsibility. Do not assume everything is covered; ask for the information and advice you need.

 selffunding
Self-funding: Not just for the big guys anymore
New options mean it’s time to revisit self-funded health plans?
By Jill Armstrong, Account Executive, Employee Benefits

 

The promise of lower healthcare premiums has yet to materialize. Instead, they continue to rise. According to a study by the Henry J. Kaiser Family foundation, the average annual premium in 2014 for employer-sponsored coverage was $16,834 for families and $6,025 for single coverage.
Add in the new taxes, fees and restrictions introduced by the ACA on fully insured medical plans, and it is little wonder more employers are seeking new ways to stretch their healthcare budgets.
While self-funding or self-insuring has always been an option, with more and more options becoming available, employers of all sizes are moving toward self-insurance. Consulting firm Mark Farrah Associates reports that traditional, fully insured membership dropped more than 10% from September 2013 to September 2014.

 

New options coming on stream
One of the most significant trends is that traditional carriers like United Health Care, Humana and Aetna are developing products and solutions that are more self-funded in nature. These are usually described as hybrids or level funded plans. Another term to be aware of is integrated stop loss.
While it’s not practical for groups under 25 lives to go this route, self-insuring and hiring a third-party administrator under an ASO (administrative services only) contract can save larger employers 10% to 25% on healthcare costs. These savings come largely from eliminating the profit margins carriers build into fully insured products to cover the actuarial risk they take for unexpectedly high healthcare costs.

 

ACA exemptions improve the picture
It is important to remember that the ACA is holding employers with 50 or more employees accountable for all its new compliance rules. If your group falls into the 50 – 100 employee range, and because self-funded plans are not subject to many ACA provisions, it may be a good time for you to exercise your independence. (The exemptions for self-funded groups are part of the reason why the big carriers have stepped up their hybrid offerings.)
In addition to cost savings, another good reason to consider your options is self-funded plans are exempt from state insurance regulations and premium taxes under the federal Employee Retirement and Income Security Act (ERISA).
Here is a quick summary of some of the benefits of self-funding or partially self-funding your employee benefit plan:
  • Cost Savings: Fully insured carriers pass on expenses such as the Health Insurance Tax and the Exchange User Fee to employers. Self-funded employers are not subject to these fees and taxes. Additionally, you keep what you don’t spend (instead of the carrier keeping the profit of excess reserves).
  • Transparency: You know where your company’s health funds are going and you gain access to much more data – data that has traditionally been used by the insurance companies to set trend.
  • Administrative Control: Having access to more data gives you greater control over plan design. This not only improves your ability to control how health plan dollars are spent, it enables you to tailor your plan to better fit the needs of your organization and employees.
Generally speaking, fully insured carriers for groups over 50 lives are doing very little to help their customers with compliance. Whereas when you are self-funded, through a traditional method, your TPA (third-party administrator) is usually much more hands on and doing much more for compliance (with a small fee attached).

 

Where to begin?
The best way to explore your self-funding options is to start with your broker. Keep in mind that it is important to work with a broker who does not shy way from self-funding because of the short-term loss of revenue it represents to them. Even though they make more money on the commissions associated with fully-insured premiums, a far-sighted broker knows the best way to ensure their own long-term success is to protect their clients’ ability to prosper.
At HealthSure we take an objective approach and can help you explore all your options including self-funding. The important considerations we assess include:
  • Number of employees
  • Cash flow
  • In-house resources (e.g.: and HR manager, already fulfilling many roles, must have time to manage a few more moving parts)
  • Suitability of hybrid or level funded options
  • Finding the right TPA and reinsurer, network and pharmacy benefit manager
No one said finding the perfect solution for offering a sustainable and effective employee benefit plan would be easy. But, at HealthSure, we hold ourselves responsible for making it as simple for you as possible.

HealthSure Newsintroducedavid
Here we grow again!
HealthSure welcomes David Hampton to the team
The HealthSure team continues to grow and we are pleased to welcome David Hampton as our newest account executive.
“We’re excited about the energy, experience and conviction David brings to our team,” Brant Couch, President says. “I am looking forward to working closely with him, and helping him develop many fruitful and long lasting relationships.”
Taking the time and making the effort to fully understand the needs of others is a hallmark of David’s personality. As account executive, he is responsible for initiating and nurturing great relationships with key decision makers in hospitals, physician groups and related healthcare organizations.
Prior to joining HealthSure, David provided coverage comparison analysis and educated brokers and clients on the legislative changes affecting healthcare practices for Texas Medical Liability Trust.
If you would like to learn more about David, visit his LinkedIn page. If you would like to meet him, send an email or call (512) 879-3171.

 

OUR MISSION

HealthSure’s mission is to help healthcare organizations succeed in the increasingly complex world of risk and insurance.

Our unmatched focus on healthcare means we know the industry better than anyone else.

It is our job to make sure:

  • Your insurance does what you expect, 100% of the time
  • You stay ahead of ever-changing laws and regulations
  • We’re always there when you need help

We believe simplicity is the cure for crushing complexity.

Small but important print

This communication is designed to provide a summary of significant developments to our clients. Information presented is based on known provisions. Additional facts and information or future developments may affect the subjects addressed. It is intended to be informational and does not constitute legal advice regarding any specific situation. Plan sponsors should consult and rely on their attorneys for legal advice.

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This email was sent to danielles@healthsure.com by brantc@healthsure.com |

 

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