As group health insurance costs continue to increase, many employers are looking for new, creative ways to save money while still providing their employees with coverage.
Reference Based Pricing
Reference Based Pricing is a rapidly growing strategy that a number of employers are using to save money on group health insurance costs. This technique gives the employee the ability to choose any provider without the limitations and higher costs of a traditional provider network. By choosing to take advantage of this method, employers have the potential to save between 15 and 20 percent on group health insurance costs.
Association Health Plans
According to the U.S. Department of Labor (DOL), Association Health Plans are defined as “group health plans that employer groups and associations offer to provide health coverage for employees.”
In April of 2019, the federal government began to allow small employer groups to form new associations based on industry and finally receive access to group health insurance plans typically only reserved for larger companies. While many association health plans already exist, the new legislation eliminated the geographic barriers previously in place.
According to the Congressional Budget Office, “four million Americans, including 400,000 who otherwise would lack insurance, will join an AHP by 2023.”
Direct Primary Care
Direct Primary Care (DPC) is an alternative payment model to third-party billing. With DPC, there is a flat monthly membership fee and nothing else. Employees have access to a physician of their choice and the physician remains accountable to only their patients. This option can also exist alongside a comprehensive major medical plan.
For groups of five or more, level-funded plans are becoming increasingly popular. These plans boast a nationwide network of hospitals and physicians and are offered by a number of reputable insurance carriers. Designed to offer more flexibility to employers, level-funded plans are ERISA compliant and partially self-insured with a savings potential of 10 to 15 percent. Many also offer return-of-premium potential.