Across the country, inflated medical costs and balance billing for medical care have become the norm, leaving businesses to pick up the hefty tab or pass along the costs to their employees. Many of your employer clients feel stuck without options when it comes to offering a health plan to their employees, unsure of where to turn for advice about cutting costs, without cutting benefits.
Enter the Employer Bill of Rights, an initiative created to inspire and empower businesses to understand and exercise their rights as they make health plan decisions and manage health care costs within today's complex health care system — decisions which affect their businesses and the employees who rely on these critical benefits. Businesses across the country can rally behind these rights and take an activist role as they seek alternatives to the status quo.
Know your rights
The Employer Bill of Rights is rooted in the mission that businesses have the right to:
- receive transparent information about the costs of health care services
- audit medical bills
- defend fair health care payments
- make direct connections with providers to achieve agreeable outcomes
Let's take a look at the eight rights that make up the Employer Bill of Rights:
- Pay a fair amount for health care.
Paying for health care should be treated like any other business expense — especially since it often represents the second largest operating expense after employee wages. Employers do not have to accept the status quo for their health plan and pay medical expenses that are inflated.
- Know what health care services actually cost.
A traditional PPO health plan typically leaves the employer in the dark about how plan parameters were set by the insurer and medical provider. Businesses have a right to know the cost of medical services.
- Audit medical bills.
Billing mistakes and inflation of medical charges are common. Businesses and individuals have a right to carefully evaluate health care expenses. A line-by-line auditing of medical bills helps ensure the charges are accurate and fair.
- Explore your health plan options.
By partnering with an informed and experienced health care consultant, employers can discover health plan options beyond the traditional PPO model. A self-funded health plan, where employers pay for medical claims as services are rendered instead of providing ongoing and advanced payments to an insurance company, can take employers on the path toward more control over healthcare spending.
- Offer your employees a comprehensive and affordable benefits program.
Employees count on their employer-sponsored health plans to be reliable and financially feasible. Employers have a right to offer health care solutions that minimize the financial burden on the plan member.
- Design a health plan to meet your unique needs.
The best health plans are well-rounded and flexible. Employers have the right to customize their health plan to determine the approach that best suits the needs of their business and team. Unlike traditional health plans, self-funded plans are customizable.
- Defend the best interests of your business and your employees when paying for health care.
Surprise medical bills and inflated prices are common, but health care finances do not have to be handled alone. Employers and individuals have the right to access advocacy services that support fair and reasonable health care payments and help employers meet their fiduciary responsibility.
- Make direct connections with providers and health systems.
Fair outcomes can be achieved when people work together. By creating direct partnerships with providers and health systems in their communities, employers can become good stewards of health care by building bridges and driving quality health care experiences for all.
Traditional plans are not serving employers and employees
The Employer Bill of Rights is a stark contrast to the traditional health insurance experience. When employers embrace these rights, many may realize that the plans they offer are not serving their employees well and are costing their businesses too much money.
More than one-quarter of insured adults, about 41 million people, are “underinsured.” Health plans hardly cover plan members against exorbitant out-of-pocket costs or deductibles. This is creating an unsustainable burden for employers and employees alike.
- Unexpected medical bills are a top concern for Americans, with 4 in 10 insured adults reporting that they have received an unexpected medical bill in the past year, according to the Kaiser Family Foundation.
- Employer health care costs have risen 24 percent between 2001 and 2015, according to the Society for Human Resource Management.
Alternatives to PPO plans are showing tremendous promise and gaining nationwide attention. The California Public Employees' Retirement System (CalPERS) manages the largest public employee benefit fund in the U.S. After adapting a reference-based pricing program in 2013, the organization saw a $5.5 million cost savings over a two-year period.
And CalPERS isn't alone. Organizations of every size are looking to make changes, including the big three of Amazon, Berkshire Hathaway and JP Morgan Chase, who recently established a new health venture to improve the cost for healthcare for their employees.
The path to choosing transparency
Businesses can stand up against out-of-control costs by adopting the Employer Bill of Rights and turning away from traditional insurance plans, which have failed to adapt to the changing health care landscape.
One option for a transparent solution for decision-makers seeking an alternative to PPOs is reference-based pricing, also known as metric-based pricing.
Reference-based pricing is a bottom-up approach to health care charges that starts with the actual cost amount and adds a fair profit margin for the provider to calculate the bill. This is contrary to a PPO model, which starts at the top with a potentially inflated price from a facility's chargemaster and offers a fluctuating, inconsistent discount.
Self-funded employers looking to make a change can consider a reference-based pricing plan to save up to 30 percent in costs in their first year and rest assured knowing they are working with transparent providers.
Steve Kelly is the co-founder and CEO of ELAP Services, a leading health care solution for self-funded employers based in Wayne, Pa. He is a recognized expert in the insurance, employee benefits and risk management industry, bringing more than three decades of experience solving his clients' complex healthcare challenges.
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