Cost of Employer-Provided Health Coverage Passes $20,000 a Year

An ‘Annual poll of employers by Kaiser Family Foundation finds premiums rose 5% for family plans; ‘It’s the cost of buying an economy car.’

Let us show you how we help our employees operate at substantially below this scary number through SharedFunding.

Click here for The Wall Street Journal article for more insights into the survey results.

Are Groupons For Healthcare Good or Bad? Yes

Groupons have been in the medical news lately (for example “Groupons For Medical Treatment? Welcome To Today’s U.S. Health Care” and “Groupons for medical care are helping patients save money“) with stories of deeply discounted rates for some medical tests in several local markets across the country.

Here’s the net of the good and bad from a smattering of the news reports.

Good because the lower rates may make the tests affordable for some who need them and who may otherwise pass because they simply can’t afford.  In other words, if you have to have a test and don’t have coverage or if you have coverage but your plan’s deductible coupled with your network’s contracted rate for the test are out of reach, the Groupon rate may make it affordable.

Bad because the discounted rates sometimes prompt people to undergo testing unnecessarily and often without their doctor’s input or supervision.  In some respects, it could be a cousin to a practice known as “predatory testing” (offering free initial tests designed to encourage more not so free tests and/or costly treatments…….when they may not be necessary or advisable in the first place.)

And, bad because the quality is sometimes not up to par leading to a retest which usually ends up being performed somewhere else at an additional cost.  Essentially, patients end up having to pay multiple times to have the test done right.

According to one of the reports “Groupon dictates the price for its deals based on the competition in the area — and then takes a substantial cut”…

‘They take about half. It’s kind of brutal. It’s a tough place to market,’ said a provider that signed on with Groupon to market for his testing facility.”

Makes me think we could do just as well or even better fending for ourselves with a qualified provider of our choosing without Groupon as the middleman.  If a test is needed, first talk to your doc and ask for a list of multiple qualified providers.  And/or, check your insurance carrier’s online provider network directory for participating providers. Most insurance carriers now have online cost comparison tools that you can access by logging into your account. They are simple to use and allow you to shop for where you receive your healthcare. Once you have your lists of providers, check for quality ratings and pricing information.

After you do a little homework, select a few qualified providers.  Ask each of the providers for their best rates; and, what kind of break they’ll give you for pre-payment or paying in cash.

For Medicare Peace of Mind Turn To BBG65Plus

We have some very exciting news to share with you. Earlier this year, with great encouragement from our clients, we launched bbg65^Plus.

Thinking about Medicare can be truly daunting. For years our clients have leaned on our knowledge, experience, and hallmark customer service for guidance on what to do and where to start when it comes to all things Medicare.

Now you can also turn to us to find the right coverage. We provide the full range of:

• Medicare Advantage Plans,
• Medicare Supplemental or Medigap Plans, and
• Prescription Drug Plans

We match each person with the plan that’s right for them. And, we simplify the enrollment process making the transition to Medicare smooth and pain-free.

The age 65 and over demographic represents the fastest-growing segment of the U.S. workforce. Today, Medicare plays a much more significant role in the workplace.

Successfully transitioning to Medicare is a big deal that can also be a big cost and coverage win when done the right way. We can help.

Our goal centers on providing Medicare Peace of Mind. We remove the mystery and help you make the right decision about your Medicare coverage.

In launching bbg65^Plus, we’re excited to serve the needs of our business clients as well as the Medicare needs of our families, friends, colleagues, and neighbors in the communities where we live and work.

So, for anyone needing assistance and hoping to experience Medicare Peace of Mind, please contact us. We’d love to help.

And, of course, we’d be very grateful if you’d help us spread the word.

(e) 65Plus@bbginc.net; (p) 866.845.8600 x130

The Compound Savings of SharedFunding

The value of SharedFunding is that it creates a gap between what you were paying for traditional insurance and what you pay with SharedFunding.

Unfortunately it’s typical for insurance costs to increase annually. However, we’ve found that by creating a gap with SharedFunding, that increase can be on less premium.

Traditional Insurance

You’ll be glad you brought it! Photo by Ricardo Resende on Unsplash

When you have traditional insurance, you need to buy the plan that you want to offer your employees. Makes sense, yes? The problem is that you are paying for this plan for every employee regardless if they use it or not.

The real benefit of insurance can be compared to an umbrella. You’ll be glad you have it with you when it downpours. Additionally, you’ll never mind when the sun comes out and you are carrying your umbrella.

At BBG, Inc., we’ve come up with a way to provide the protection of an umbrella at a fraction of the cost of traditional insurance.

SharedFunding

With SharedFunding, you can reduce the high premiums you are paying to the insurance company by buying catastrophic coverage. You are still buying an umbrella but just with a little more gap between you & the umbrella.

Typically we recommend purchasing the highest deductible available ($5,000, $6,350, $6,650). However, BBG will work with you to determine the appropriate amount of risk.

Then we’ll build out the plan that you want to promise your employees and deliver it to them. This is called SharedFunding:

1. You buy catastrophic coverage from the insurance company
   • Your annual premium costs go down ↓
2. We deliver the plan you want to your employees
   • It’s a promise to pay rather than buying from the insurance company

But won’t we fund the difference back in claims?

Healthcare is used unevenly and in the 14 years we’ve been doing ShareFunding, no client has ever funded back the entire premiums savings in claims.

Here is a simple example:

Things are starting to look up. Photo by Jude Beck on Unsplash

Let’s say that traditional insurance costs you $1.00 (haha, I know what world do I live in?? Just trying to keep it simple).

BBG comes in and recommends you buy the highest deductible possible for $0.60. Right now things are looking up as you’ve reduced your healthcare costs by 40%.

The next step involves building the SharedFunding plan you would like to promise to your employees. BBG can build any type of ShareFunding plan you’d like. Most employers choose to mimic their former traditional plan. This way employees still get the same benefit they are used to receiving.

Most likely you’ll end up funding approximately $0.20 in claims for employees who utilize the SharedFunding plan.

That brings your final cost up to $0.80 for a 20% savings. Not too bad, eh?

The Compound Savings of ShareFunding

Saving 20% on your healthcare costs when you initially set up SharedFunding is lovely, yes? But what makes it even lovelier is what happens in the years to come.

Since pictures speak 1,000 words, let me explain with a graph:

Here at BBG we tend to look at the average cost per employee per year as a benchmark. The reason is that your enrollment fluctuates each year. You can calculate your average cost per employee per year by taking your total costs divided by your current enrollment.

The above graph includes numbers from a real client who has been SharedFunding since 2012.

As you can see their average cost per employee per year were at $15,197 with traditional insurance in 2012/2013. By switching to SharedFunding that year, we were able to reduce that number by 39%. Whoa!! Then in 2014/2015 they embraced a more robust form of SharedFunding and reduced their cost another 21%.

While we are pretty good, we are not magical. Unfortunately, you’ll notice their healthcare costs did rise through the years with SharedFunding. However, the true value of SharedFunding is that your increases are on a smaller premium amount; hence, the compound savings of SharedFunding.

To show this we assumed they would have received a trend increase of 5% each year if they had stayed on the traditional route. Based on past renewal trends, this was an appropriate average increase to assume.

Firstly, they are not even close to what their average cost per employee was in 2011/2012. Secondly, while both graphs go up the gap between them grows!

Closing Thoughts

Healthcare is likely one of your biggest expenses as an employer. The math of self-funding may not work for small employers, but the math of SharedFunding most likely will.  Here are BBG, we have fun delivering strong benefits to your employees while reducing the amount of premium you pay to the insurance company.

Your employees will still have access to the network that the insurance carriers provide. Additionally, you will be protected from catastrophic claims with a mini stop loss in purchasing a high deductible plan from the carrier. Furthermore you can deliver the same benefits to your employees by promising to fund. Lastly, with a promise to fund, you, the employer, will be able to retain more dollars in your business.

If you are interested in seeing if SharedFunding might be a good fit for your company, don’t hesitate to reach out to us for a no obligation analysis.

Lastly, we will be running a series on SharedFunding and in this series we plan to get into the details on a more granular level.