It’s Year Two (or longer) of the self-funded employee benefits program at your organization and inquiring minds (e.g. your senior-level executive team) are asking: How’s it going?
You know a lot more than you did early on in the process and you think it’s going well. But, where and how, specifically? Are claims and costs under control and employees engaged? Could more be done to reduce pricing or improve your cash flow?
Now’s the time to take a deeper dive, evaluate what’s working and what could work even better. And here’s another bonus: Optimizing your processes will free up time for the “human” to be put back into HR, giving you more time for conversations and relationship-building.
Where to start? Here are six steps to guide you.
- Analyze your administrative processes.
There tends to be a tradeoff in the first year when you move to self-funding. While you may be saving 8 percent to 10 percent on healthcare costs, it’s also taking up an additional 20 to 30 hours a month in management time. HR, legal, finance – everyone has a hand in it to ensure risk is managed and controls are in place. But by the second year, it takes fewer hands to do the lifting. Evaluating administrative processes will uncover efficiencies and determine what exactly is mission critical. Take a close look at processes for billing and claims reconciliations and eligibility auditing. Now is also a good time to start reviewing HR tech solutions to minimize transactional burdens of the job.
- Make sure you’re getting best in class pricing and support.
Revisit pricing on a regular basis, as it’s a constant challenge to hold carriers’ and vendors’ feet to the fire through performance guarantees. What should you look at? Stop-loss guarantees are one area to examine. Discount guarantees ensure you get more bang for the buck on doctors’ fees. It is also important to make sure you’re getting the right credits for wellness, communication and plan implementation. Further, hold carriers accountable for performance relative to member experience: Are calls picked up on the first or second ring? Is there a low average hold time and one-call resolution?
- Monitor your utilization dashboard.
Your dashboard is a snapshot of what’s truly driving claims, and your team needs to meet regularly to review what it tells you about plan utilization. Claims are completely transparent under self-funding and monitoring patterns of usage is critical to keep costs in line. The dashboard reveals what’s sticking out in terms of benchmark norms and gives you an opportunity to tweak your program in real time to respond. That’s also the intelligence you need to influence employee behaviors when it comes to benefit use. A growing pattern of emergency room visits, for example, might lead to communications that helps employees understand other health care options covered in your plan. It all combines to make your utilization dashboard a powerful tool for your entire team.
- Plan for disasters because you never know.
Disaster planning means taking a walk through the decision-making process for potentially dire scenarios to make sure everything from cash flow to vendor and employee communication is covered. A host of possibilities needs to be considered for impact on your benefits plan, claims and costs. How would triplets impact your health spend? If a late stage cancer emerged just prior to renewal, how would that change our decision making? Would a significant increase in healthcare spend change the decisions you make on the business side? By establishing a rigorous and inclusive decision-making process, your organization can be better prepared for every contingency.
- Revisit your float options.
Float – how much time you have in your disbursement cycle – is important to everyday cash flow management. Bringing your finance folks in to help examine your carrier policies to see where tweaks, fine-tuning and honing can save you money. You’’ll want to explore your options including can you leverage the carrier for a week or two of funding if you have a million dollar claim? Can you use a carrier that will integrate a 30-plus-day float on dental?
- Make sure you’re communicating and engaging.
The fact is that going self-funded is going to have an impact on your culture. The decision to let your employees in on this fact is very important. The key messages are “your claims are our claims” and “we all have a hand in controlling our costs.” Help employees understand what a claim or expense is. The utilization dashboard signals how employees use the self-funded employee benefits program and where opportunities lie to inform and further engage. Keep employees’ needs and desires front and center and let them into the partnership as a self-funded participant and you’ll be able to achieve greater savings.
There’s always room to refine your self-funded employee benefits program and even minor tweaks can be helpful in reducing claims and costs. Taking these steps, and doing so before too much time goes by, will help you optimize and “future-proof” your program. Contact a HUB advisor to optimize your self-funded program.