How to Design A Health Benefits Plan That Saves You Money
by Mike Roche
Want to design a health benefit plan that saves your business money but unsure where to start? Begin by creating a corporate culture that educates employees on the plan and encourages its use. Why? It helps influence your employees to make behavioral health changes before they develop medical conditions that require costly, specialty care.
Whether due to lack of knowledge, motivation, or education, some employees may ignore “minor” health symptoms; common chronic ailments like hypertension, high cholesterol, and obesity are often minimized by the patient, but if these health risks go unchecked, they can lead to more dangerous – and costly – medical conditions.
Beyond creating a holistic company culture focused on leading a healthy lifestyle through education and empowerment, you can use Benefit Plan Design to influence where your employees seek treatment.
Health Benefits Plan Design in Action
Provide employees with financial incentives for utilizing high-quality, low-cost providers, and they’re more likely to utilize care that saves them – and the plan – money. For example, you can design your plan to feature a multi-level network structure using our Premier Network. Multi-level (or tiered) networks incentivize employees to go to doctors that are high value – good quality at a fair price – while still offering employees and their families choices in a broader network.
Here’s how it works: let’s say your company gives employees three options based on quality and cost.
- Level 1: High-Value providers from a particular health system with zero out-of-pocket costs for the employee, but is located 25 miles from your workplace.
- Level 2: High-Value providers from a different health system located 5 miles from your workplace that requires $150 in out-of-pocket costs for the employee.
Based on these options, your employees are financially incentivized to choose Level 1, which saves both them and their employer money. However, they could pay more to choose Level 2 if the provider’s location is important to them, or pay even more to choose Level 3, which could be a provider they trust or have chosen in the past.
- Level 3: All other providers in the network that require $300 in out-of-pocket costs for the employee.
This design structure gives employees more transparent options when choosing a provider, and over time, saves money without limiting their health care options.
What Makes Benefit Plan Design at The Alliance Different?
The Alliance develops contracts with high-value provider systems based on a percentage of Medicare through Reference-Based Contracting®. Combining this strategy with the purchasing power of our membership, The Alliance negotiates deep discounts with large providers (so long as they’re added to the plan’s top tier of benefits). This results in real cost savings for everybody involved.
Where to Start?
If you want to incentivize your employees to use low-cost, high-value providers while still offering them the flexibility to choose within a broad network of providers, our Premier Network offers customized provider levels – all of which are within our Smarter NetworksSM.
If you want to learn more about how The Alliance can help you with your benefit plan design, including how to offer leveled tiering, contact us.
About the Author:
Mike joined The Alliance in 2015 and is responsible for working with prospective employers, their broker/consultant, and their TPA partners to introduce them to self-funded health benefit strategies, sharing data-based information to manage their health care spend, and serving as the voice of The Alliance for membership expansion.