I’m going to jump on a soap box for this article. The subject we will discuss is one that, historically, we have seen as a problem for small businesses more than anything else in this space. It can lead to small businesses overpaying for their health benefits mainly because they work with incompetent or uninformed agents. Are you ready? Set. Go.
Mediocracy is Too Prevalent in the Insurance Space
The issue at heart is that most businesses make decisions annually on renewal increases, plan changes, employee offerings, etc., without ever seeing an iota of claims data from their health insurance provider. Most employers aren’t even aware they can access their claims data, and as someone in this industry, that makes no sense to me.
The reason for this comes from years of mediocre service and support for small and mid-sized businesses from agents and brokers looking out for their pocketbooks while trying to make as much money as possible while doing as little work as possible. This is not how we do business here at H|BC, but unfortunately, it does seem to be the norm in this space.
We always tell people that big payroll companies who act as brokers are just collecting commissions for playing brokers. They usually outsource your daily service and renewal upkeep to a third party so that they don’t ever have to talk to you again! Good luck getting any kind of service or assistance in that type of non-personal environment. Customer service at many insurance companies is terrible as well. Why? Because nobody is taking a stand against them, and they continue to make record profits.
In their minds, mediocrity is good enough.
These are things that I dislike about this industry. Still, at the same time, these items make us stand out as we help our clients if / when there are issues with insurance providers, and we are big believers in providing service with genuine quality and concern for our clients.
ACA Plans – Stay or Go?
At H|BC, we strive to make sure our clients are making educated decisions, not just on how to pick the best-priced product from a vendor or whose network is a better fit, but on what is driving your costs and if you are on the correct pricing platform for your health plan. For example, suppose you have bad claims or conditions, and the insurance company is losing money on you. Then, in that case, you should stay on your ACA plan; better yet, you might have to. But if not, you could save 25% – 30% on your healthcare spending. Isn’t it worth a little due diligence to figure out what’s going on behind the scenes with your plan?
If you are with a Blue Cross or UnitedHealthcare type plan and year after year, they are profiting to the tune of 50%, 60%, or 70%; you probably want to look at moving to a vendor that will price you based on your claims experience and future outlook.
In theory, the Affordable Care Act sounds like a great idea because it lowered costs for people who spend a lot on claims but raised costs significantly for those who don’t. Younger, healthier populations in small groups and on individual plans have seen their costs increase profusely since the passing of the “Affordable” Care Act. Fully insured plans in the small group space are unfortunately subject to these same community rating rules that individual plans are. The individual market has been destroyed since the ACA passed, but that is another discussion for another time.
The small group fully insured market isn’t quite so bad, as we at least have some PPO options with a few vendors. Still, we did lose more than half of the providers we had before 1/1/14, as most of them did not like the results of the secret behind-the-scenes government meetings that created this legislation – so they simply just pulled out. Remember when the government said you could keep your plans and your doctors? These were 100% false statements.
Why You Aren’t Getting Your Claims Data When You Need It
But I digress. Suppose you are on a small group fully insured plan, and your broker or payroll company (or whoever your benefits provider is) is not helping you get your claims reports, at least for a quick review each year at renewal. In that case, they are doing you a complete disservice. They are forcing you, unbeknownst to you, to make uneducated decisions on one of the most expensive line items in your company, the company’s health insurance program.
There’s not anything else you would buy for your company without doing proper research. Manufacturers will not buy expensive equipment without knowing exactly what they want and need.
You’re not going to buy a fleet of 18-wheelers if you only need to deliver pizzas. My point is, please make sure what you are buying and who you are buying from make sense and that you aren’t being taken advantage of. To me, brokers and agents who only sell fully insured plans to smaller groups and don’t even talk about underwriting disrespect their clients and the industry. They are not acting in the consumers’ best interests; instead, they are doing what is easy and best for their future workload.
So How Do You Fix This? How Do You Get the Data?
It will vary slightly based on the vendor, but most want a request from the business to the insurance provider asking for this information in writing. Some might take an email request, but most insurance providers have a templated request letter that the business owner or benefits admin needs to sign and send in. There’s one more caveat, the State of Texas says these vendors have to release the data within 30 days of the request, so guess what some of them will do?
You probably guessed it. They take the request in and send you the info around day 28 or 29. Not everyone does this, but a lot do. They typically know if you are requesting claims data that you are at least an educated client or are on that path and that you might be leaving if they are profiting wildly off of your account, so they’re in no rush to release these reports typically.
The good news is that in Texas, that data is available as it is mandated to be released. In getting the data, the first level of reporting is all financial info, so you aren’t going to learn about someone’s private health situation just by looking at the monthly claims vs. premium report. It just lists out each month that you’ve had coverage with that vendor (going back up to 3 years) and shows you how much you paid out in premiums and how many claims you have paid out. This is known as the Tier I HB 2015 report (the Texas State Legislation that requires the health insurance providers to release this data, where otherwise they probably wouldn’t.).
There are two additional layers of information that you can get, and these usually will require written requests if you didn’t have to provide one already. Be warned. Large claims data will include some private health information (PHI), so take precautions when handling these documents. This next level of reporting is known as a Tier II report, and it will identify any large claims within your employee base that have gone over $15K.
The Tier III report is a supplement to Tier II, and it tells you if the claims are ongoing or not and if the claimant is in any kind of case management program (normally, they are not).
We’ve shared a lot of information in this article, but this is the most important takeaway – don’t make plan decisions as a business owner or someone in charge of your company’s benefits program without a handle on how your claims are running. Suppose there are not a lot of claims and your employee base is overall pretty healthy. In that case, you could be paying a lot less in insurance costs if you moved to a platform that is priced based on your expected future claims liability, not the insurance company’s expected losses for the entire region for that year (which is how the ACA pricing model works.)
Call H|BC Today!
Thanks so much for reading along! Hope you took something away from this article. Please let us know anything we can help with, like getting your claims data for the first time.