How to Build a Better Health Plan Through Self-Funding
by Melina Kambitsi Ph.D. | SVP, Business Development & Strategic Marketing
Trachte Building Systems’ total cost for self-funding their employee health benefit plan has decreased every year since 2012 – when they joined The Alliance. During that same time period, their workforce more than doubled.
But achieving (and maintaining) that success meant changing nearly everything about their health plan, and when Trachte’s self-funded health program costs increased by 46% in 2010, they knew effective change was required. Here’s what they did:
- Switched health benefits brokers. Trachte turned to a different consultant when the status quo, transactional approach to risk management and employee benefits failed to deliver the results they needed.
- Enlisted a new TPA to administer their newly designed health benefit plan. Trachte shifted to a TPA that had complete expertise in self-insured programs and better resources to guide employees to high-value health care.
- Identified high-value providers for the top 25 procedures used by enrollees. High-value providers offer quality care at a lower cost, so enrollees’ out-of-pocket costs are set lower for these providers. When enrollees choose a provider who is not on the high-value list, they pay the difference in costs out-of-pocket. Trachte’s TPA provided a concierge service to guide enrollees to high-value care.
- Educating employees about the impact of self-funding on the company’s bottom line, as well as their out-of-pocket costs. Trachte uses an annual health fair to help educate and remind employees of the concierge service as well as the company’s wellness program.
- Getting the employees to “buy in.” Trachte created two healthcare plan options. The first being a traditional plan with a premium, deductible, and copay structure. The second was a high-deductible health plan (HDHP) with a health savings account (HSA). For the HDHP plan the company matched employee contributions at 100% until the HSA was fully funded at the Federal limit. Over 90% of Trachte employees have chosen the high-deductible plan with the HSA. Before the new benefits were implemented, Trachte and their broker ran modelled employee utilization and spend, and found that employees on the traditional health insurance plan would benefit significantly by the HDHP with the HSA and company match.
To learn about their proactive approach to self-funding, read the case study on Trachte Building Systems. If you’re interested in learning how The Alliance works with employers to make health care more affordable, contact us.
About the Author:
Melina Kambitsi Ph.D. joined The Alliance in 2017 and leads the teams responsible for business development, client development, and strategic marketing. Dr. Kambitsi comes from Network Health in Milwaukee and Menasha, Wis. where she was chief sales and strategy officer. In this role, she was responsible for sales and underwriting, strategic planning, product development and risk-based contract analytics. Earlier she was senior vice president of sales at Blue Cross Blue Shield in Honolulu, Hawaii and the vice president of sales, marketing and product development at Blue Cross of Northeastern Pennsylvania.