Debunking Employer Healthcare Costs
Twenty percent of employers, of all sizes, increased their health-related benefits over the last 12 months according to the SHRM 2019 Employee Benefits Survey.
And, no surprise here: healthcare benefits and their rising costs remain top of mind. But, while SHRM talks about more and more employers shifting healthcare costs to employees, fortunately, that’s not what we’re seeing.
Lumity works with employers who are out to lower costs on both fronts—for them and their people. And we’re helping them achieve this, too, by leveraging their claims data and negotiating with the health insurance carrier on their behalf.
Claims data is the key to better rates
Most employers with less than 250 employees have zero, or scant, visibility into their group’s claims performance. (Heck, we’ve even seen employers with 500+ employees in this situation). And, whenever this is the case, you’re in a weak position to negotiate better rates. You need to know what kind of hand you’ve been dealt.
Lumity brings to the midmarket the kind of data insights that are typically only available to self-funded, big companies, so your health plan renewals move in sync with your actual health risk profile.
A single high renewal will continue to inflate your costs year after year.
Even if your broker got you a 5-8% trend renewal rate, which is generally accepted as the annual increase in health care costs for the U.S., you really have no way of knowing if this is fair. Was your trend renewal stacked on the back of a high renewal rate last year?
One bad renewal rate will escalate your costs year after year even if your health plan utilization decreased, and your group is now healthier. Without claims data, your costs will trend up even when you’re due for a negative renewal rate.
On average, Lumity clients reduce their healthcare costs by 15-20% without compromising coverage. That’s six-figure savings. Sometimes high six-figure savings. What they do with this discovered budget depends.
Companies use the funds to hire or reinvest in their business. High growth companies, especially those in tech that are competing for talent, often apply the funds towards lowering employees’ premiums and/or reducing their out-of-pocket costs by making an employer contribution to a Health Savings Account (HSA) or a Health Reimbursement Arrangement (HRA). With this approach, they use “better benefits” to win and keep talent.
What would you do?
Across all clients with a Jan. 1, 2019 health plan renewal, the average renewal rate was -1%. Yup. Negative one percent. If this seems like a spectacular claim, I encourage you to check out what we’ve done for clients such as Greenhouse, the Linux Foundation, and Wealthfront.
We’re not your typical brokerage. We leverage claims insights and plan modeling to bring price transparency to the murky healthcare ecosystem. Because you and your people deserve better.
We believe in our mission. So much so that we do the work up front, so you know the results you can expect before you decide whether to partner with us. Contact us for a consultation.