Frustrated With Your Current Benefits Plan?
Changing plan designs is an incredibly tough decision for an employer. It’s hard to know how changes will impact the overall budget. However, sometimes plan design changes are necessary to manage costs, particularly when cost drivers could be reined in by adjusting plan specifics. Employers also need to consider how plan design changes will affect current and future employees—providing a quality benefits plan is of vital importance to attract and retain quality employees.
The best solution to this problem is to engage in plan modeling. Plan modeling allows managers to determine the best use of resources and to engage in experimentation without taking on risks.
Insurance Benefits Plan Modeling
Plan modeling makes it possible to ask questions regarding how claims would have been paid differently given a modified design. Many employers start this process by looking at historical claims data and conducting claims analysis to identify problem areas in their health plans. With the results of the analysis, employers can explore potential solutions for lowering costs. (For instance, if emergency room costs were disproportionately high, an employer could consider raising the emergency room copay.)
Even if you are just thinking about making plan design adjustments because you suspect it would drive better claims results, the use of modeling can help you test-drive those changes before implementing them. The results of the modeling will help you see the outcome of suggested changes to your current benefit structure.
Some of the types of decisions plan modeling allows employers to see beforehand include:
Deductible and coinsurance structure
Office visit vs. specialist copay
Urgent care vs. ER copay
Different model of health plan (experimenting with an HSA plan, for example)
Prescription drug tiered rate structure
Increased efforts at utilizing preventive care