Health Plan Decoded · For CFOs & HR Leaders
The questions your broker hopes you never ask, answered straight.
The benefits industry is structurally designed to keep CFOs uninformed, because an informed CFO stops overpaying. This is the field guide to becoming informed.
Contents
Twelve sections, ninety-two questions. Click any question to jump straight to its answer — or use the search bar above to filter the whole document.
WHY YOU’RE OVERPAYING, AND WHY NO ONE TOLD YOU
Most of you don’t. The mandate applies at 50 full-time equivalents, part-timers count toward that math, which catches employers who assume they’re exempt, and even then it’s a penalty for not offering, not a law that requires it. Everyone under 50 offers coverage by choice, to compete for talent. Know which camp you’re in before you treat “we have to” as a reason for anything.
↑ ContentsBecause in a fully-insured plan, your premium isn’t priced only on your claims. It’s priced on the carrier’s whole book, their trend assumptions, and their margin. A good year for your people doesn’t earn you a lower renewal. It means the carrier kept the difference. You’re funding a pool you can’t see and don’t control.
↑ ContentsClaims, administration, network access fees, broker compensation, taxes, and carrier profit. In a fully-insured plan you get one number and no itemization. The entire model depends on you not asking for the breakdown, because once you see it, you start negotiating the parts.
↑ ContentsFully-insured: you pay a fixed premium, the carrier takes the risk and keeps the surplus. Self-funded: you pay your own claims plus admin, insure the catastrophic ones, and keep the surplus yourself. Same care, same networks in most cases. The difference is who owns the upside. You or the carrier.
↑ ContentsIt’s more transparent, not more risky, when it’s built right. Stop-loss insurance caps your exposure on any single claim and in aggregate, so your worst case is a known, budgeted number. The real risk is staying fully-insured, calling a fixed premium “safe,” and overpaying for the privilege.
↑ ContentsThere’s no magic headcount, and the old “100 lives” rule is outdated, level-funded and captive structures make self-funding work well below that, and I work with groups starting around 40 employees. The real questions are your claims stability, your cash position, and your appetite to actually manage the plan. Size is a factor. It’s not the answer.
↑ ContentsWhat changes: cash flow, transparency, and who keeps the surplus. What doesn’t: your employees’ cards, networks, and experience. Most CFOs brace for a disruption that never comes and miss the one to their P&L, which was the entire point.
↑ ContentsFour: that it’s only for huge companies, that one bad claim wipes you out, that employees will notice, and that fully-insured is “safer.” All four are marketed to you by the party that profits when you stay put.
↑ ContentsThat the incentives worked the way they were built to. An informed employer renegotiates, shops, and self-funds; an uninformed one renews. That doesn’t make your broker a bad actor. It makes the compensation structure worth understanding. Ask why you’re only hearing this now.
↑ ContentsNot sure where you land on this one? Ask me.
THE SPECTRUM, AND FINDING YOUR RIGHT POINT ON IT
It’s a spectrum, not a switch: fully-insured, level-funded, self-funded with stop-loss, then group captive and other pooled structures at the sophisticated end. Each move hands more transparency and surplus to you, and asks more of you in return. The goal isn’t the far end. It’s the right point for your risk and appetite.
↑ ContentsBoth, depending on the contract. Level-funding lets you self-fund with training wheels: a fixed monthly cost with a potential refund of surplus. The trap is in the fine print, so ask one specific question before you sign: is surplus calculated on claims incurred or claims paid? That single definition is where most level-funded refunds quietly disappear.
↑ ContentsAll three pool separate employers so you can buy like one big one. The differences that matter are who you’re pooled with, how you exit, and who holds the money. MEWAs are state-regulated, and some have failed and left employers with unpaid claims, which is the real reason to ask about solvency and exit terms before you ask about savings.
↑ ContentsFour questions, in writing, every time. Who else is in the pool and how are they underwritten? How are losses allocated if the group runs hot? What do I have to put in up front, and when do I get it back? And how do I leave, how much notice, and who pays my run-out claims? A good program answers all four on one page.
↑ ContentsThe honest answer: it depends on your claims profile, cash flow, and how hands-on you want to be. A stable 60-life group and a volatile 400-life group belong in different structures. Anyone who quotes you a structure before they’ve seen your data is selling, not advising.
↑ ContentsGood is transparent, measurable, and built around your data, not the carrier’s book. You can see your claims, you know your fixed costs, your surplus comes back to you, and your advisor is paid by you. If you can’t explain where every dollar goes, it isn’t good yet. It’s familiar.
↑ ContentsEvery year at minimum, and not just by reading the renewal letter. Markets, your claims, and your headcount move. The structure that fit at 50 lives can be leaving money on the table at 150. Treat it like any other major line item: reviewed on a schedule, not on autopilot.
↑ ContentsNot sure where you land on this one? Ask me.
THE INSURANCE THAT TURNS UNLIMITED RISK INTO A BUDGETED CEILING
Stop-loss is the insurance behind self-funding. It caps what you pay on any one claimant (specific) and what you pay across the whole plan in a year (aggregate). If you self-fund, yes, you need it. It’s what turns “unlimited risk” into a budgeted, known ceiling.
↑ ContentsSpecific protects you from one catastrophic claimant: a transplant, a NICU stay, a million-dollar drug. Aggregate protects you if the whole plan runs hot, lots of ordinary claims adding past expected. Specific is the lightning strike. Aggregate is the flood. You want coverage for both.
↑ ContentsIt’s the contract’s claims window: the first number is how many months a claim can be incurred, the second how many months it can be paid. A 12/12 covers claims incurred and paid inside the year. A 15/12 or 24/12 adds run-in protection for claims from before the contract started. A 12/15 runs the other direction, claims incurred in the year and paid up to three months after it ends, which is the form you care about when you’re leaving a carrier, not arriving. The narrower the window, the more gap risk you’re quietly holding.
↑ ContentsAggregate accommodation means your stop-loss carrier reimburses you during the year when claims exceed the aggregate attachment point, instead of making you wait until the contract ends. Without it, you front the cash on a bad year and get paid back months later. It costs a modest amount of premium. For a first-time self-funder, it’s worth buying.
↑ ContentsFixed costs, administration, stop-loss premium, PBM fees, are predictable and billed monthly. Claims are variable: some months run under budget, some over, and you fund what’s actually incurred. You set a monthly funding rate that covers expected claims, and your good months bank against the bad ones. Ask for your maximum-liability number before you sign. That’s the true worst case, and it’s a figure you can put in a budget.
↑ ContentsA laser is when your stop-loss carrier singles out a known high-cost claimant and sets a higher deductible just for them. It’s legal and common. The bite comes at renewal: a new laser, or a lasered claimant plus a rate hike, can blow up a budget you thought was locked. Negotiate laser terms and rate caps up front, not after you’re surprised.
↑ ContentsClaims don’t stop when a contract ends. They’re incurred now and paid weeks or months later. Run-in covers claims from before your contract started; run-out covers claims incurred before it ended but paid after. Someone funds that tail. Make sure you know whether it’s you.
↑ ContentsTerminal liability coverage extends your stop-loss to pay the run-out claims after you cancel a contract. If you ever plan to switch carriers or structures, and you should stay free to, it keeps you from paying that tail twice. It’s cheap insurance against being trapped. Usually worth it.
↑ ContentsNegotiate rate caps and no-new-laser provisions before you sign, not after. A rate cap limits how much they can raise your rate at renewal; a no-laser clause stops them from singling out your sick claimants next year. Carriers offer these when you ask and you have leverage, which is before you’re locked in.
↑ ContentsNot sure where you land on this one? Ask me.
BUYING INSURANCE WHOLESALE, WITH OWNERS WHO SHARE THE GAME
A captive is a group of employers who pool their claims risk, buy reinsurance as a group, and share in the results. You get big-employer pricing and transparency without being a huge employer. Think of it as buying insurance wholesale, alongside other owners who have skin in the same game.
↑ ContentsA single-parent captive is your own: you fund it, you own it, and it’s built for very large employers. A group captive pools your risk with other mid-market employers under shared governance and reinsurance. For most companies in the 40 to 700 range, group is the realistic door. Single-parent is a different weight class.
↑ ContentsMost group captives require a capital contribution, real money, held as your share of the risk pool. It’s typically returned when you exit in good standing, but it’s cash out of your account in year one and it belongs in the budget conversation from the start. Ask three things: the amount, the terms it’s held under, and exactly what triggers its return.
↑ ContentsIt’s the analysis that tells you whether a captive actually beats your current structure, using your real claims data, not a sales pitch. Done right, it shows your expected cost, your risk band, and your break-even under different scenarios. If it tells you only good news, it isn’t a study. It’s a brochure.
↑ ContentsYou’re trading a little autonomy for a lot of leverage and transparency. There’s shared governance and rules of the road, but you also see your data, keep your surplus, and gain pricing you couldn’t get alone. The control you “give up” is mostly control you never had in a fully-insured plan.
↑ ContentsThis is the fear, and it’s mostly a misread of how modern group captives are built. Your specific risk is capped, the group’s risk is reinsured, and losses are structured so one bad member doesn’t sink the rest. You share in results, but the downside is banded, not unlimited. Ask exactly how losses are allocated before you join.
↑ ContentsAsk before you join, not after. Good exit terms are written, time-bounded, and answer three questions: how much notice you owe, what happens to your capital contribution, and who funds your run-out claims. Vague exit language is the single biggest red flag in any pooled arrangement.
↑ ContentsA VEBA is a tax-advantaged trust that holds your health plan’s assets. It can smooth funding and add tax efficiency for the right employer, usually larger, stable groups with predictable claims. It’s a tool, not a default. It makes sense when the tax and funding math clearly clears the added complexity.
↑ ContentsNot sure where you land on this one? Ask me.
WHERE THE LEAST TRANSPARENT MONEY IN YOUR PLAN HIDES
Because pharmacy is where the least transparent money in your plan hides. It’s not just drug prices: it’s spread pricing, retained rebates, and formulary games that steer patients to the most profitable drug, not the cheapest. Pharmacy is often the fastest-growing line in your plan, and the one your PBM is least eager to explain.
↑ ContentsA PBM sits between your plan and the pharmacy, deciding what’s covered and at what price, and pocketing plenty along the way. You need the function. You don’t need the opaque, conflicted version of it. Transparent pass-through PBMs exist; most employers just don’t know to ask.
↑ ContentsSpread pricing is when your PBM charges you more for a drug than it pays the pharmacy, and keeps the difference. You’re billed $100, the pharmacy gets $60, the PBM pockets $40, and nobody tells you. Across a full plan that spread runs into six and seven figures. The fix is a pass-through contract where you pay the real price plus a disclosed fee.
↑ ContentsDrug makers pay rebates for formulary placement, and those dollars are supposed to lower your cost. How much reaches you depends entirely on contract language most employers never read: your PBM can keep a share, or define “rebate” narrowly enough to keep most of it. If you don’t know your rebate pass-through percentage, assume it isn’t 100%.
↑ ContentsCover, exclude, or apply criteria, but pick deliberately, because the default is expensive. Blanket coverage can move your pharmacy line fast; a blanket exclusion creates a recruiting and morale problem you will hear about. Most employers land in the middle: clinical criteria, prior authorization, and a required adherence component. Decide it as a budget question with a policy attached, not as a formulary accident.
↑ ContentsA biosimilar is a near-identical, lower-cost version of a biologic. Same clinical effect, a fraction of the price. Your plan may not be using them because the higher-priced brand carries a bigger rebate, and rebates flow to whoever builds the formulary. Ask what share of your biologic spend has a biosimilar available, and what share is actually being dispensed. The gap between those two numbers is money.
↑ ContentsThey change whether manufacturer copay assistance counts toward your employee’s deductible. Under an accumulator it doesn’t, so the member hits a bill they never saw coming once the assistance runs out; a maximizer spreads the assistance across the year instead. Both save the plan real money and both generate real member complaints. If you run one, the fix is communication before January, not after the first angry call.
↑ ContentsA carve-out pulls pharmacy out of your medical carrier’s bundle and contracts it separately, usually with a transparent PBM. It trades a little convenience for a lot of visibility and control over your fastest-growing cost. For most self-funded mid-market employers, it’s worth pricing out. The bundle is convenient for the carrier, not for your budget.
↑ ContentsYes, and expect resistance. Your audit right is exactly what the opaque model relies on you never using. A real audit checks whether you actually got the pricing, rebates, and terms your contract promised, and it routinely finds money. If your PBM makes auditing hard, you’ve learned something before the audit starts.
↑ ContentsSpecialty drugs are a small share of scripts and a huge share of spend, driven by high-cost biologics, generous formulary placement, and site-of-care markups. You can control it: clinical review, site-of-care steering, alternative sourcing, and copay assistance. It takes an advisor willing to manage it, not just pass the bill through.
↑ ContentsBecause the price under your plan has little to do with the drug and a lot to do with where it’s filled, how it’s coded, and what your PBM decided to charge. Same molecule, different site of care, different markup. That variation isn’t a glitch. It’s the business model. Transparency is how you flatten it.
↑ ContentsNot sure where you land on this one? Ask me.
FOLLOW THE CHECK. IT TELLS YOU WHO THEY WORK FOR
Most brokers are paid by the carrier: a commission baked into your premium, plus bonuses you never see. That means the party advising you on your spend is paid more when your spend goes up. It’s not necessarily malice. It’s a structural conflict, and federal law entitles you to the exact number, because the CAA requires written disclosure of both direct and indirect compensation. Follow the check.
↑ ContentsThese are bonuses carriers pay brokers for hitting volume or retention targets across their whole book, money that has nothing to do with serving you and everything to do with keeping business placed. Be aware, not paranoid. Ask your broker to disclose every dollar of carrier compensation, contingent included.
↑ ContentsA commission-based broker is paid by the carrier, as a slice of your premium. A fee-based advisor is paid by you, a flat, disclosed amount, so their incentive is to lower your cost, not preserve it. Same title on the door, opposite economics behind it. Know which one you’re paying, and how.
↑ ContentsAsk to see the marketing: which carriers they approached, what came back, and why they recommended what they did. A broker shopping the market can show you the spread. One who isn’t will hand you a renewal and a reassurance. “Trust me, this is the best option” is not a market check.
↑ ContentsAn RFP is a structured bid where you put your benefits program out to competing advisors and carriers. Run one when you haven’t tested the market in three years, when your costs are climbing, or when you just want to know if you’re being served. It’s not disloyal. It’s due diligence, and the best advisors welcome it.
↑ ContentsFive questions, same five, every year. What are you paid on this account, and by whom? What’s my actual claims experience, not just the renewal number? Did you market my plan, and to whom? What’s my total cost of healthcare per employee, and how is it trending? And what would you change if this were your money? Watch whether the answers get sharper or vaguer.
↑ ContentsDisclosed in writing, before we start: every dollar, every carrier, base plus overrides, bonuses, and contingents. Where my compensation would change based on what I’m recommending, moving you off fully-insured, for instance, I show you the delta so you can weight the advice accordingly. The CAA requires the disclosure. I treat it as the start of the relationship, not a compliance box. Ask me for the number and you’ll have it.
↑ ContentsNot sure where you land on this one? Ask me.
YOU CAN’T MANAGE WHAT YOU CAN’T MEASURE
If you’re self-funded, it’s your plan and your data: claims, utilization, high-cost claimants (de-identified as required), pharmacy detail, all of it. Under the CAA’s gag-clause prohibition, your right to your own information is stronger than ever. If a vendor treats your data as theirs to ration, that’s a red flag about the whole relationship.
↑ ContentsBecause data is leverage, and leverage is easier to keep if you don’t have it. Carriers and some TPAs make data access slow, partial, or expensive, not because they can’t share it, but because an employer who can read their own claims starts making decisions the carrier would rather make for them. Push. It’s yours.
↑ ContentsTotal cost per employee per year and its trend. Large-claim frequency and severity. Pharmacy as a share of total spend. Your fixed-cost ratio. And your surplus or deficit against expected. Five numbers, reviewed every quarter, tell you more than a hundred-page renewal deck.
↑ ContentsYou don’t need a PhD. You need the five numbers above and someone to frame them. If your advisor can’t turn your data into a one-page story, get one who can.
↑ ContentsMedical loss ratio is the share of your premium the carrier actually paid out in claims. Large group carries an 85% floor, but rebates are calculated across the carrier’s whole book, not your group, so a genuinely good claims year usually earns you nothing. Ask for three years of MLR. If your loss ratio ran well under the floor and no rebate ever arrived, you funded someone’s margin and called it insurance.
↑ ContentsIt means treating your plan as what it is, often your second- or third-largest expense, with the same rigor you’d apply to any line on your P&L. Known inputs, measured outputs, variance you can explain, and decisions driven by data instead of a renewal letter. You’d never run a department this blindly.
↑ ContentsMore options than the carrier will volunteer: specialty-drug sourcing, site-of-care steering, case management, centers of excellence, and making sure your stop-loss is filed correctly and on time. The worst move is to do nothing and absorb it. A high-cost claimant is a management problem, not just a bill.
↑ ContentsAgainst real peer data, same size, industry, and region, not a national average that hides more than it shows. Good benchmarking tells you whether your cost per employee, your trend, and your plan richness are ahead of or behind comparable employers. It turns “our costs went up” into “our costs went up more than they should have,” the sentence that drives action.
↑ ContentsEverything: claims, premiums or funding, admin, stop-loss, pharmacy, fees, and the compensation buried in all of it, divided by your employees. Most CFOs can quote their premium and not their total cost. The gap between those two numbers is where the overpayment lives. Find your real number first.
↑ ContentsNot sure where you land on this one? Ask me.
THE FRONT DOOR TO YOUR ENTIRE CLAIMS PICTURE
DPC is a flat monthly fee for a primary-care doctor with real access: longer visits, direct messaging, no per-visit billing. It can save money by catching problems early and cutting downstream claims, specialist visits, and ER use. It’s not a silver bullet, and it isn’t free. But for the right population, the claims math works.
↑ ContentsDPC is the membership model: flat fee, direct relationship, usually independent practices. APC is the broader idea, primary care built around outcomes and total-cost management, often integrated with your plan and data. DPC is a delivery model; APC is a strategy. They overlap, and the marketing blurs them, so ask what you’re actually buying.
↑ ContentsNavigation means the member calls a nurse before they schedule, and that nurse routes them to a high-quality provider at a contracted price. Done right, the member’s cost is waived, no copay, no deductible, and the plan pays dramatically less than network pricing. It’s the rare strategy where the member and the plan both win. Ask any vendor for their engagement rate, because navigation nobody uses saves nothing.
↑ ContentsCount them. PCP, telemedicine, carrier navigation, nurse line, urgent care, ER, a musculoskeletal vendor, a diabetes vendor, HR, if an employee with back pain doesn’t know which one to call, you’re paying for capability that never changes behavior. More vendors is not better navigation. Sometimes the fix is fewer doors.
↑ ContentsUsually yes, and ask this first, because it’s the question your employees will ask. Most self-funded plans rent the same major networks, so the cards change and the doctors don’t. Before you move, run a disruption analysis against your actual claims: which providers your people used, and whether they’re in the new network. Don’t accept a provider count. Ask about your providers.
↑ ContentsBecause access, friction, and awareness beat good intentions every time. If it’s hard to get an appointment, unclear what’s free, or nobody reminded them, they won’t go, and you pay for the expensive version later. Preventive care is only a savings strategy if people actually use it. Engagement is the missing half of the ROI.
↑ ContentsA Center of Excellence is a facility with proven outcomes for specific high-cost procedures: joint replacements, cardiac, transplants. Steering employees there, often with travel covered, buys better outcomes and lower total cost at the same time. For procedures where quality varies wildly and mistakes are expensive, yes, it’s worth it.
↑ ContentsNetwork adequacy is whether your employees can actually get the care they need, in-network, without a long drive or a long wait. A big network on paper means nothing if the right specialists aren’t in it or aren’t taking patients. Test it against where your people live and what they actually need, not the carrier’s provider count.
↑ ContentsThe data says DPC helps, for the right population, implemented well, and measured honestly. It’s not magic, and it’s not for everyone. When a whole industry pitches one solution, it’s usually because it’s easy to sell, not because it fits every plan. Ask for your projected impact on your claims, not the vendor’s national case study.
↑ ContentsNot sure where you land on this one? Ask me.
WHERE THE REAL ECONOMICS LIVE, WRITTEN TO BE SKIMMED
The ones that quietly move money and risk to you: “shared savings,” “access fees,” “discount guarantees” with carve-outs, and definitions of “covered” that shrink when it matters. The contract is where the real economics live, and it’s written to be skimmed. Three words in the wrong clause can cost you more than a whole renewal negotiation.
↑ ContentsA shared-savings fee lets a vendor take a percentage of the “savings” they claim to generate, often measured against an inflated benchmark they set. So you pay a fee on savings that may be partly fiction, calculated by the party collecting the fee. Ask exactly how the baseline is defined. If they set the baseline and take a cut, the incentive writes itself.
↑ ContentsThrough markups, fees, and financing stacked on top of the actual care. A large claim runs through networks, vendors, and “savings” programs, each taking a percentage, and a poorly structured stop-loss or contract can multiply what should have been a bounded cost. The care cost $500K. The system’s take is what turns it into something far larger. That’s a contract problem, not a medical one.
↑ ContentsIt depends entirely on 47% off of what. A big discount off an inflated chargemaster can still leave you paying more than a smaller discount off a fair price. Carriers love to sell the discount percentage because it sounds like a win while hiding the base price. Ask for the net cost, not the discount. The percentage is theater.
↑ ContentsBy reallocating what you already spend. Most plans leak money on spread, retained rebates, opaque fees, and inefficient care delivery, money that, once recovered, funds richer benefits at the same or lower cost. The budget usually isn’t too small. It’s poorly deployed. Fix the leaks and you’ll find room you didn’t know you had.
↑ ContentsNot sure where you land on this one? Ask me.
“I TRUSTED MY BROKER” IS NO LONGER A DEFENSE
Under ERISA you’re a fiduciary, legally required to run the plan in your employees’ best interest and control costs prudently. That means knowing what you pay, why, and whether it’s reasonable. Health plans got a pass that retirement plans didn’t. That era is ending, and “I trusted my broker” is not a defense.
↑ ContentsThe Consolidated Appropriations Act stripped away the excuse of not knowing. It requires broker and vendor compensation disclosure, bans gag clauses on your own claims data, and reinforces your fiduciary duty to police plan costs. Translation: you now have both the right to the information and the obligation to act on it.
↑ ContentsMore than most mid-market sponsors realize. The recurring list: the gag clause attestation, RxDC prescription drug reporting, Form 5500 and the summary annual report, your mental health parity comparative analysis, a current Section 125 plan document if you pre-tax premiums, and an SPD distributed on schedule. None of these are hard. All of them are documented failures if you skip them.
↑ ContentsThe CAA bans contract language that stops you from seeing your own claims and pricing data, and each year you must attest that none of your vendor contracts contain it. Most sponsors sign it having never read the underlying contracts, which means they’re certifying something they can’t defend. Read the contracts before you sign the attestation.
↑ ContentsIt’s a class action alleging the employer breached its fiduciary duty by overpaying for prescription drugs, brought by its own employees. The case was dismissed on Article III standing, not on the merits, which means the underlying duty was never tested and the next plaintiff will fix the standing problem. If a Fortune 50 with a full benefits team draws that suit, a mid-market employer on autopilot isn’t safe by being smaller.
↑ ContentsBuild a paper trail that shows prudence: a benefits committee with minutes, documented vendor and broker compensation, a record that you benchmarked and marketed the plan, and a process for reviewing fees. Fiduciary duty is about process, not perfect outcomes. If you can show you asked the right questions and acted reasonably, you’re in a very different position than the sponsor who can’t.
↑ ContentsAssuming the broker or carrier has it handled. Fiduciary duty can’t be outsourced: you can hire help, but the legal responsibility stays with you. Most mid-market sponsors have never seen their vendors’ full compensation or documented a single prudent process. That gap, not any one filing, is the exposure.
↑ ContentsNot sure where you land on this one? Ask me.
TWO STRATEGIES THAT ARE POWERFUL, AND OVERSOLD
An ICHRA, individual coverage HRA, lets you give employees tax-free dollars to buy their own individual health insurance instead of you sponsoring one group plan. You fund a defined contribution; they choose the plan. It shifts you from managing a plan to funding a benefit. For some employers that’s freedom. For others it’s a headache in disguise.
↑ ContentsIt works in specific situations: a distributed workforce, wildly different employee needs, or a strong individual market in your area. It’s oversold as a universal fix. Whether it fits depends on your geography, your population, and your tolerance for the administrative and employee-experience realities. Run the scenario on your actual workforce before you believe the pitch.
↑ ContentsAn ICHRA is affordable only if your contribution leaves the employee’s share of the lowest-cost silver plan in their area under the ACA threshold, and that threshold has moved, changing the math on every contribution decision you make this fall. Affordability varies by employee age and ZIP code, so it isn’t one number, it’s a calculation per person. Run it on your actual census before you set the contribution.
↑ ContentsBecause they’re sold as “set a budget and walk away,” and that’s not how they land. They fail on weak individual markets, poor communication, sticker shock at enrollment, and no support when employees have to shop alone. The concept is sound. The execution is where it dies.
↑ ContentsGroup purchasing leverage, plan-design control, and a simple, familiar employee experience. You trade the predictability of one negotiated group plan for individual-market variability your employees now navigate. Sometimes that trade is worth it. But go in knowing what you’re handing over, not just what you’re hoping to save.
↑ ContentsRBP throws out the carrier’s negotiated network pricing and pays providers a set multiple of Medicare instead. It can cut costs dramatically, because it refuses to pay inflated chargemaster rates. The trade-off is active management and real member support, done well it’s powerful, done cheaply it puts your employees in the middle.
↑ ContentsIt’s the number-one fear, and a well-run program is built specifically to handle it, with member advocacy, legal support, and provider agreements that head off balance bills before they reach an employee. Balance billing happens when RBP is implemented cheaply, without that support layer. The model isn’t the risk. Cutting corners on the support is.
↑ ContentsWhen your costs are high, your claims are dominated by facility spend, and you have the appetite for a more hands-on model with strong member support. It makes less sense for smaller groups or ones that want a hands-off experience. RBP is a strategy, not a plug-in: right for the employer ready to manage it, wrong for the one who wants to set it and forget it.
↑ ContentsNot sure where you land on this one? Ask me.
WHAT TO DO WITH ALL OF THIS
Less than you fear, if it’s planned. Vendor setup, TPA, stop-loss, PBM, care navigation, data analytics, starts roughly 90 days before your effective date. Your team’s job is light: current plan data, decisions at a few defined checkpoints, and enrollment logistics. The real risks are data errors in file transfers and confused employees, and both are managed with a calendar.
↑ ContentsYou don’t flip one switch. Crawl: get off the carrier’s terms and get real transparency into your own data. Walk: add stop-loss, carve out pharmacy, look at a captive. Run: direct contracts, reference-based pricing, on-site or virtual primary care. It’s a three-to-five-year path, and step one is simply knowing your true total cost per employee.
↑ ContentsFour things: your last 36 months of claims data, your total cost per employee, your broker’s compensation in writing, and the five-number breakdown of your renewal increase, medical trend, Rx trend, demographics, plan design, and carrier margin. Walk in with those and the conversation changes. Walk in with a renewal letter and you’ll get a renewal.
↑ ContentsNot sure where you land on this one? Ask me.
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Healthcare cost analysis for employers who treat benefits as capital allocation. If your situation doesn't fit neatly into one of these ninety-two answers, that is usually the most interesting conversation to have.
This FAQ is educational and general in nature. It is not legal, tax, or specific plan advice. · Tess McCoy, MS, CEBS, CSFS · Employee Benefits Consultant, Hotchkiss Insurance · Health Plan Decoded · The Benefits Brief