The complex web of alternative funding strategies require significant due diligence and can be overwhelming to sort through, especially in the wake of health care reform.
Pending changes to small group rules in January 2016 are driving demand for the funding solutions. Most prominently, groups with 50-100 employees will be subject to community rating legislation that governs how rates are developed and the type of coverage offered. Most states are also changing the definition of “employee” to the federal full-time employee (FTE) definition, broadening the scope to include union employees that may have been excluded under previous small employer definitions.
With the right alternative funding strategy, companies can achieve expected cost savings in excess of 15%. For example, USI helped a company that grew from 179 to 200 lives save an estimated $215,000 by capping benefits cost at the pre-renewal level with 100% of any claim savings being returned (at year end) and used these funds to set up a self-funded dental plan.
USI has prepared an informational article, Alternative Funding Strategies Could Lower Costs Stemming from Community Rating Change, and a Brainshark presentation for employers with 50-100 employees, which explains the following:
- How the new rules can potentially impact you
- Ways to quantify the impact on your company
- Solutions available to eliminate or mitigate the cost
Review your options and contact USI to consult on the best solutions for your organization.