Historically self-funded health plans focused on the middle and large group market, this alternate funding mechanism has more efficiently financed long term benefits cost for these employer groups, while better controlling “trend”. But the “risk avoidance” underwriting approach of these programs do not work for small group – you end up a with churn & burn model with a low client retention rate.
There have been a few small group models used over the years that worked reasonably well, however, the market never really became main stream until the passage of the Affordable Care Act (ACA). With the passage of all the federal mandates and the increased cost shifting due to carrier losses on the exchanges, a sweet spot has been created for a structured risk pool product that will allow smaller employers to pool their resources. We refer to these programs as Consortiums, or a Virtual Captives if you will. The participants get the benefits of a Captive, without the cost, complexity or lag time of a traditional captive model. Ideal candidates are:
- PEOs
- Franchises
- Associations
For a direct writing producer, or an association, that has control over a block of business and has ever considered creating their own white labeled product, now might be the time. Here’s why…
Momentum
Many companies’ rates have gone up significantly due solely to the changes in how fully insured rates are calculated (a narrowing of the rate bands). Every company has seen their rates go up because of the challenges associated with Specialty Drugs, mandatory “richening” of benefits and increased cost shifting from government programs to private payers. These increases, on top of the ever-growing list of conflicts of interest in the fully insured market, have created a tailwind of support for self-funding like we’ve never had before. Fully Insured and ASO plans are trending at 7-12% a year (look at their renewal calculations), while a properly designed self-funded program can trend at 1-3%, largely parallel with Medicare Trend and Wage Growth. The fact is for a company with average to better than average health, there’s no better tool on the market than a self-funded plan.
“If you’re honest with yourself when you look into the mirror, are “you” part of the problem, or the solution? We can show you how to remove the conflicts of interest in the healthcare delivery model, and have a successful, rewarding career. All it takes is the courage to try! “
Brand Identity
A well designed, white labeled consortium model creates momentum in a producer or association’s organization like few other things. Plus, you can have a program customized with the tools and programs that offer the highest value to your clients. However, cost and speed to market has always been the largest barriers that have prevented many organizers from launching their own programs. But the market has continued to evolve, and these barriers have become much less of an issue.
Control
Producer revenue erosion has been a challenge for many. Many smaller brokerages have been bought out by the “big boys” much like large hospital systems have been purchasing outpatient treatment centers and physician offices. Rather than risk having to sell your business or merge with another entity, why not create your own program that offers your clients high value, and you the ability to better control your economic future. If you offer your clients premium products and services, word of mouth advertising still works, and business will generally find you.
If you have control over 2-3K employee lives and want to explore having your own white labeled product, call today and let’s discuss the benefits of a consortium model. [/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]
