Benefits Modeling: How to Speed-Date Plan Design

Providing a quality benefits plan is of critical for attracting and retaining talent. If you've begin thinking that your current plan isn't isn’t quite all you need it to be and you’re looking for a change, it's important to know that plan design changes aren't to be taken lightly.  You have to consider how changes will affect current and future employees - not to mention the potential impact on your overall budget.  Plan design changes might be necessary to manage costs- but where do you begin?  How do you weigh up your options while mitigating risks?

The solutions lies in plan modeling; the speed-dating of the benefits world.  Plan modeling allows you to experiment with a variety of different options through hypothetical situations that you can use to determine the best use of resources and the best opportunity to maximize the benefit of certain changes.

Plan Modeling in a Nutshell
Plan modeling makes it possible to ask a variety of questions about how claims would've been paid differently given a modified design. You can get started by looking at historical claims data and conducting claims analysis to identify problem areas in your health plans. Afterwards, you can see which areas can be adjusted to lower costs. For example, if emergency room claims are through the roof perhaps it's worth raising the emergency room copay while providing employee education about urgent care and any 24-hour nurse hotlines that many carriers have available.

Even if you're 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. Plan modeling puts you in the driving seat when it comes to your health plan decisions; you choose the path.

Plan modeling can help you decide between

  • Deductible and coinsurance structures
  • Office visit vs. specialist copays
  • Urgent care vs. ER copays
  • Different health plan models (Health Savings Accout-qualified plans, Health Reimbursement Arrangements, etc.)
  • Prescription drug rates
  • Increased efforts at using preventive care

With access to all the data provided by plan modeling, you'll be able to uncover ways to help control costs. By viewing how much money new strategies can save over time, you begin to eliminate the risk of benefits missteps. With these data points you can make educated, strategic decisions that balance the financial benefit with employees’ needs.

Your company generate significant time and cost savings by successfully identifying and managing even the smallest change to your plan design.  The smallest percentages of identified high-spending areas represent the most promising potential for savings. The better the model, the greater the potential for cost savings. The more models you run, the more likely you’ll find hidden ways to curb benefits costs.

In a burgeoning, costly area where employers are trying to limit expenses, plan modeling programs are essential.

If you’re looking to find out more about plan modeling today, contact Lumity for more information on how to get started in your workplace.


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