Understanding health insurance options can be a daunting task, especially with ever-rising costs forcing you to carefully balance value against price. You're juggling day-to-day operations while trying to ensure your team gets the healthcare they deserve. Going into your renewal with a well-thought-out plan is your best bet for long-term, sustainable healthcare solutions. But where do you begin?

What to Expect in 2024

Health insurance costs have been rising steadily for the past two decades. With a 7.7% increase in 2023 and a predicted 6% hike in 2024, your expenses are going nowhere but up. Driven by inflation, a shortage of healthcare workers, and high-cost specialty medications, these increases are a reality you can't ignore. If you're in North Carolina, you're likely feeling this pinch even more, as our state has higher-than-average health insurance rates.

Adding to this, out-of-pocket costs for your employees are also rising. The maximum OOP cost a plan can allow for 2024 plans has increased to $9,450 for individual employees and $18,900 for families. Without a strong renewal strategy, you may increase OOP costs to minimize premium increases leaving your employees to ask, “Why am I paying more for less.”

Bound by fiduciary responsibilities and a genuine desire for your employees' well-being, you're aiming to identify the best possible health plans. Given these mounting challenges, developing a strategic approach to your renewal is crucial.

Proactive Measures:

1. Start Early: Don't put off your renewal. Start talking with your broker at least three months before your plan renews and explore your options.

2. Benchmark Benefits: Gauge how your current benefits are perceived by your team and how competitive they are in attracting top talent. Employee surveys can offer valuable insights here.

3. Be Ready with a Current Census: Keeping an up-to-date employee census not only speeds up the quoting process but also aids in timely decision-making. Look back at actual hours worked so you have a clear understanding of who is full-time and benefits eligible.

Understanding Your Options

You might think that traditional fully-insured plans are your only option, but that's a common misconception. In reality, a wider array of options exists than most realize. Your benefits brokers should guide you through these options, taking into account factors like your company's size, turnover, industry, and preference to manage or offload financial risk. Below, we delve into health plan options available to businesses of all sizes.

• ICHRA: Growing in popularity, Individual Coverage HRAs enable businesses to set a budget and give employees the flexibility to enroll in the individual plan of their choice. A business's location drives how far ICHRA dollars go. In WNC, individual health insurance rates are about the same as group rates, making ICHRA a solid option.

• Membership-Based Healthcare: Direct Primary Care models provide employees with direct, unhindered access to healthcare providers at transparent and reasonable prices. Forward-thinking businesses are coupling DPC with Healthshare memberships to address major medical expenses, presenting a comprehensive and cost-effective alternative to conventional insurance plans.

Available to companies with 20+ employees.

• Level-funded Plans: A middle ground between fully-insured and self-funded options, these plans provide fixed premiums and potential returns on unused funds. 

• Self-funded Plans: Best suited for businesses with fifty or more employees, the companies take on more financial risk but have opportunities for long-term savings by actively managing claims and only paying the administrative costs and the claims incurred. A flexible plan design and transparent partners are key to controlling costs.  

Thinking Outside the Box

The major carriers you grew up with bring a sense of security, but independent carriers can offer more flexibility for cost management. When considering self-funding, look to the independent plan administrators and Pharmacy Benefit Managers who are aggressively working to control costs for businesses. Your broker's portfolio should include a mix of carriers to ensure the best plan options are available for businesses' unique needs. 

Don't Underestimate Your Team

It's easy to assume that your employees will react negatively to changes in their health plans, but often, their response is actually minimal. In reality, some team members may already be employing alternative healthcare payment strategies. High deductibles and copays have led employees to explore various cost-saving avenues, such as utilizing prescription coupons like GoodRX, negotiating medical procedure costs, or enrolling in local, membership-based Direct Primary Care. A shift in your health plans can be well received when leadership helps communicate the reason for the change, especially when there is a win in it for employees.

Choose the Right Partner

Your broker should do more than quote rates. They should be an active partner in plan administration and employee communication. Go for a broker who genuinely cares about the well-being of your business and employees.

The healthcare landscape may be ever-changing, but you're not helpless. Early planning and a strategic mindset can help you navigate this complex terrain. So start now, and make sure you and your decision-makers are prepared to make informed choices.

Cindy Kimmel, owner and Benefits Advisor at Kimmel Benefits+, brings 15 years of expertise in corporate HR and employee benefits. She specializes in helping clients reimagine their approach to benefits, aiming to maximize value for employees while controlling costs. Learn more at KimmelBenefitsPlus.com.