100+ Employees
Because of your size, you have a considerable amount of flexibility regarding the types of health care plans you can offer your employees, as well as how you will fund them. And, because of the statistical credibility inherent in a large group, you are better able to correlate premium costs with actual claims experience. As a result, plan design—as well as chronic disease management, wellness programs and other techniques—can have a long-term positive impact on your claims experience and costs.

How rates are established:

For groups with 100 to 300 employees…
That are not large enough to be statistically credible on their own, insurers balance the claims experience of your group with the performance of the entire rating pool to create a more balanced determination of rates. In years when your group’s claims experience is worse than the pool’s average, you will benefit, and vice versa. Over the long term, your costs should average out.

For groups with more than 300 employees…
Your claims experience is viewed to be statistically credible and is not blended with the performance of the rating pool. An underwriter will look at 12 recent months of claims experience, add a factor to cover inflation, and determine what your next 12 months of claims costs should be. This, then, determines your rate for the next year.

Claims costs are key
In the large group health insurance market, three components determine what you pay:

1. Plan administration—managing the provider network, processing claims, producing member materials, etc.
2. Risk Insurance—protecting the employer from the costs of a catastrophic claim.
3. Claims Payment—paying for medical care and related services.

More then 80% of costs go directly for paying claims. Thus, the key to managing large group risks is to focus on managing claims. This can be done through prevention, better management of illnesses and care, or by taking advantage of discounted fee schedules with networks of health providers. Your may also want to adjust your plan design, looking at the level of coverage you provide, how employees access it, and how much they contribute out-of-pocket to help pay for it.

Should you self-insure?
There are a number of ways to finance your health plan premiums; whether or not you decide to self-insure depends largely on your tolerance for risk as well as your ability to manage costs in a year when claims are substantially higher than what you anticipated. If you choose to self-insure, you’re essentially paying ala carte for the three cost components mentioned above, hoping that—in a good year—you save money on what you have to pay out for claims. Brooks can counsel you on the various aspects of premium financing so that you can determine if self-insuring your plan is appropriate for your organization.

The most important decision you will make…
Is selecting a broker, such as Brooks, who will become your strategic partner in providing the information and insights you need to make educated decisions. Brooks has an extensive knowledge of the various health insurers appropriate for your group and will guide you through an analysis of your needs to determine the most optimal solutions for providing a competitive, affordable plan.