Group Health Insurance Plans Present Perfect Storm Warnings

Regardless of your political stance on the issue, managing decisions around one of your organization’s biggest expenses, group health insurance, can seem overwhelming considering the turbulent state of healthcare reform. However, it is absolutely crucial to be prepared for more severe weather ahead to keep you on course and keep your employee benefit program afloat.
Although clear skies and smooth sailing may seem impossible in today’s climate, taking a closer look reveals opportunities for you to navigate safely, come what may.
Merriam-Webster defines a perfect storm as “a critical or disastrous situation created by a powerful concurrence of factors.” The event employers are facing is being aggravated by a combination of circumstances that includes:

  • Record-breaking premium increases
  • Suffocating ACA compliance (e.g.: Meeting design minimums and participation maximums will surely lead to further premium increases.)
  • The looming 2018 Cadillac tax

While this combination is undoubtedly powerful and somewhat unique to our time, there are other, more powerful and potentially more destructive “circumstances” constantly threatening the success of your employee benefit program.

From what I see day-to-day while helping community hospitals, physician groups and other independent healthcare providers prosper in the increasingly complex world of risk and insurance, the most dangerous circumstance for every healthcare provider is an inability or unwillingness to take advantage of change. When change is seen as a threat or, even worse, is simply ignored, it can act as a catalyst that multiplies the destructive power of other perfect storm components.

The good news is that by embracing and leveraging change, healthcare leaders can turn most threats into opportunities. For example, cost control, claims management and compliance are three areas that can either be threats or opportunities depending on how you manage change.

Sticking to the status quo cripples your ability to control the cost of providing an effective employee benefit program. On the other hand, staying up-to-date on changes as they develop creates new cost control opportunities including:
Emerging tax breaks

  • A growing number of alternatives for replacing all or part of the traditional fully-insured model
  • Increasingly effective employee communication strategies and technology, encouraging them to be better stewards of their healthcare dollar
  • A growing openness among providers of ancillary services to enter into plan-specific care delivery arrangements
  • Innovative and compelling methods for driving employee care to your healthcare facility

When it comes to claims management, employee communication plays a significant role much like it does with cost control; an informed and engaged employee will make better decisions about protecting and improving their health, and when they need healthcare, better plan utilization choices. Here too, steering employees to use your facility or a preferred healthcare partner whenever possible has a significant impact on the cost of a claim.

Finally, compliance is where complexity can quickly overwhelm a change-averse organization. But, by adopting a proactive attitude and empowering that attitude with a small but consistent investment of time, resources and leadership, staying in compliance can become an asset. It’s a little counterintuitive perhaps, but when a healthcare organization looks at compliance as an opportunity to improve care, quality, and patient satisfaction, it also creates a culture of excellence within the organization.

That culture, in combination with consistently progressive management, creates a forward-thinking organization that can prepare for and weather any storm.
It may be obvious, but I have to mention that all of these areas and many others become more easily managed when you partner with an advisor who understands your unique circumstances and is crystal clear about your goals and vision for the present and future of your organization.

If you would like to learn more about these and other strategies for taking advantage of change, please contact me.


Agent On the Record is my personal opinion column. My goal is to provide you with useful, interesting and timely information that will help you succeed in the increasingly complex world of risk and insurance.

My views do not necessarily reflect the views of HealthSure, my employer.

I welcome your feedback, questions and ideas.


Eric Boudinet


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.