Did you know that over the past 4 years under traditional group health benefits, your rates have likely gone up by 216% against what they could have been with Remodel Health?
The weight of these increases is hard to ignore. It has likely taken precedence over other important items in the budget, or worse, has fallen onto the shoulders of the employees themselves. To further add to the weight of these increases, the relative increase in health insurance costs in the past decade is 75%, compared to only 25% increase in pay.
Thankfully, alternative group health benefits have been developed over the past several years to help employers find viable solutions to unsustainable rate increases.
What is an alternative group health benefit?
Alternative group health benefits utilize managed individual models: supplemental wage increases, hybrid sharing programs, and Individual Coverage HRAs. These models move beyond the traditional approach, where an insurance product is chosen for the entire group and contribution is offered only toward that specific plan. Rather than offering a product, employees instead receive budgets to shop for personalized individual plans. Those plans are then organized together into a single bundle.
Evaluating these alternatives is simple. No matter which option you choose for your group, here are the top 3 reasons why it’s time to Unrenew your old health benefits:
1. High healthcare spending in the U.S.
There are a plethora of socioeconomic influences that impact the perpetually rising costs of healthcare in the United States. This is why HRAs first became available by the ERISA Act of 1974. The goal was to help employers lower costs utilizing consumer-driven or self-funded models of health benefits.
Unfortunately, healthcare costs in the U.S. are still the highest in the world, weighing heavily on monthly premiums. Healthcare costs are not the only issue, though. All too often, employers only sponsor copay plans, with no consumer-driven options available. Even when they are available, they are not properly incentivized by employers.
Consumer-driven plans have been deliberately designed as a method for lowering traditional usage. This does not mean forgoing care; rather, it simply means taking advantage of more efficient and affordable options.
For example, the average doctor visit without a copay costs around $115, while the average American visits the doctor around 2-3 times per year (Not counting their annual physicals or wellness visits. Preventative coverage is included with all insurance plans). Employees usually feel most comfortable paying a copay for those doctor visits; i.e., traditional health benefits. But by using HSA dollars instead under a High Deductible Health Plan (or free telehealth services), they could save well over $10,000 per year on premium costs, which could then be put into tax-free savings accounts.
Alternative health benefits leverage these innovative solutions together, providing the opportunity to lower spending on healthcare and maximize efficiency; only spend money on what you use. Future projections for these alternative health benefits are all-in-all very positive. Under either a potential Biden presidency or a renewed Trump administration, the managed individual strategy remains exceedingly bright as a method to both cut costs and care well for teams.
2. How much have your costs gone up in 4 years?
If you’ve gotten your most recent rate renewals for your current traditional group plan, you’re likely pretty happy with it. Due to the Covid-19 pandemic, many local facilities were closed in 2020. Even when they opened back up, people were much more likely to stay home.
Therefore, it should be understood that any low renewal this year is likely an artificial limit and should be expected to increase just that much more in 2021. In fact, early projections are suggesting that usage could double, causing significant increases at the end of next year.
If you’re interested in estimating what next year’s rate renewal might be, look at your group rate renewals in the past 4 years and compare them to the alternatives. From 2019 to 2020, individual plans on the Marketplace had an aggregate decrease of -0.16%. Comparing groups against individual plan rate increases over the past 4 years, consumer-driven options are increasing at half the rate as their traditional group counterparts.
When you stack up the year-over-year differences, you’ll begin to see why now is the time to rethink your traditional group health benefits. Remodel Health’s latest renewal saw an average of only 0.47% in 2020. Even a standard group size will have saved $315,104 within 4 years; a 216% decrease from their former trajectory on traditional group plans and cost hikes.
Alternative group health benefits can help employers make the most of these reliably low rate increases. For example, Remodel Health’s exclusive WageUp™ strategy gives employers the ability to let employees take advantage of advanced premium tax credits, which then serve as discounts on individual plans.
3. $23 million more into mission
Every day, we hear more stories about how alternative group health benefits have helped organizations ditch their steep annual rate increases, give raises to their employees, develop new community centers and make new hires — all of which were unattainable under their old traditional group health benefits. To date, Remodel Health has helped the organizations it serves save over $23 million.
Multiple large organizations have seen savings upwards of $500,000 in their first year by leveraging their alternative health benefit solutions, specifically combining advanced premium tax credits along with custom health reimbursement arrangements. Even small employers can see $100,000+ savings in year one by simply rethinking employee health benefits.
Now is the time to unrenew your old health benefits. Evaluate all of your options at remodelhealth.com/quiz or connect with us directly by emailing [email protected] for your free analysis to explore the full spectrum of alternative health benefit solutions and design a custom strategy for your team!
Important Notice: Remodel Health does not intend to provide specific insurance, legal, or tax advice. Remodel Health always recommends to consult with your own professional representation to properly evaluate the information presented and its appropriate application to your particular situation