Group Buying Programs and Regulatory Changes Expand Healthcare Options for Small and Mid-Size Businesses
Original article published October 19th, 2018 by Al Rubosky
* A message from Oswald (CMA’s endorsed provider of employee benefits)
It is no secret that sole proprietors and middle market employers have faced challenges when purchasing healthcare insurance for themselves and their employees. Sole proprietors find the rising costs of purchasing on the individual market a hindrance to securing the best coverage. Small employers are often limited in their selections due to size and the impact of high claims on a smaller population. Mid-size organizations find gross cost growing year-over-year as control over renewal rates seems nonexistent.
For decades, Oswald has demonstrated unparalleled success in creating and managing group buying arrangements and preferred risk pools for small and middle sized employers across nearly all industries. The strategy of grouping employers to spread risk throughout a larger pool can certainly help control cost, but that alone may not be sustainable long-term. It is imperative to implement controls and resources to manage the risk of the pool to allow it to thrive into the future. Our innovative approach has delivered benefits programs to small and mid-sized employers that rival benefits offered by large, Fortune 500 companies. These programs include resources such as Concierge Direct Primary Care Clinics, On-site Wellness Coaching and Member Advocacy resources.
Recently, Oswald has been helping organizations find coverage through Association Health Plans (AHPs). Similar to our approach with small and mid-size organizations, grouping members within an association allows us to spread risk and lower cost for association members. What we find exciting is a recent ruling by the Department of Labor (DOL) that opened the path to these plans.
Due to the DOL ruling, AHPs can now include sole proprietors and small to mid-size organizations, regardless of geographic location or commonality. The ruling also removes the prior requirement that members in a “pooled” plan share an affiliation other than just buying health care coverage. Now, businesses of all sizes can band together with the sole purpose of buying health insurance and those with multiple locations are included, regardless of geography.
Group buying arrangements, such as AHPs, can be comprised of a variety of funding mechanisms, including fully insured plans, captive arrangements and self-funded programs. Funding strategy is determined by many factors, including the group’s goals, cash flow and risk tolerance. Oswald’s approach allows us to partner with these organizations to determine the best fit.
By increasing the number of participants within a pooled population, group buying arrangements offer several advantages including:
Better cost control by spreading risk among more participants
Removal of the administrative burdens tasks through centralized support
Access to more data for better decision making and plan design
A wide variety of bundled services at little or no cost to the insured.
– Benefits enrollment
– Advocacy programs
– Mobile Apps
– Telemedicine
– Incentive programs
– Health risk reduction programs
– Decision support tools
Businesses considering making the move to this newly expanded opportunity should proceed with expert advice and some degree of caution. Association Health Plans may limit the requirement to cover the 10 Essential Health Benefits, although some services are retained under these plans.
Association plans can be offered beginning in September 2018 and it is expected that many carriers will enter this new market this fall and into early next year. The short timeline and the complexity of selecting, managing and designing association plans is often daunting and the main reason many choose to remain status quo with escalating costs and limited coverage. If the strategy is right for your business, not taking advantage of AHPs can be a costly mistake.
We believe that the number of plan alternatives and innovative funding arrangements will be attractive to organizations looking to increase efficiencies, control costs and engage employees in their health consumer journeys. We also know the markets, carriers, legislation and engagement techniques that can help simplify complexities. With our assistance and proven risk management acumen, your business can be assured that we will work with you every step of the way to ensure you understand your options and select healthcare coverage that helps you balance the benefits equation.