As health care costs continue to rise in the U.S., more and more small and mid-sized employers are pursuing a self-funded strategy for their group benefits plan.

Self-funding was often out of reach for groups of this size, but market changes and new products introduced over the last few years have made it a legitimate option. For example, it's now possible to avoid lasering employees, and there are specific employee deductibles as low as $25,000.

Often, when brokers explain these and other benefits of self-funding to groups, the response is almost disbelief: Why doesn't everyone self-fund their benefits plan?

Of course, there are a variety of reasons, but one that shouldn't be ignored is the transactional and administrative burden of the health questionnaire process. Self-funding requires health forms, and this hurdle can disincentivize brokers and employers alike from really pursuing alternate funding.

To understand why, it may help to consider the typical reinsurance health questionnaire.

What's in a health questionnaire?

As most brokers know, the health questionnaire is used to determine the health status of a group and is required to quote self-funded or level-funded plan options.

Among basic group and employee information, including name, birth dates, marital and employee status and more, employees are asked to provide fairly detailed health history information.

An employee may be asked to identify whether she or any of her dependents have, within the last five years, received treatment, testing, or a diagnosis for a wide range of conditions listed on the form.

Employees are often also asked to provide information about any diagnoses not listed on the form, as well as thorough details about any conditions they have identified. Details include the relevant employee or dependent, the condition, treatment dates, prescriptions and more.

The process of distributing, completing, collecting and submitting these forms generally causes a lot of headaches for brokers and HR administrators alike.

How are medical questionnaires typically managed?

Why do health forms cause so many issues? One reason is because of the sensitivity of the information provided in health forms, HR typically wants as little to do with the process as possible. Often, employees are asked to place their completed forms in a manila envelope left in the HR department by a certain date, which is handed off to the broker.

This is, obviously, a less-than-ideal way to manage the process. How does HR or the broker know who's completed the form and who hasn't? How do you streamline the process while maintaining employee privacy?

Even Dwight Schrute of “The Office” faced challenges with the questionnaire process in the episode “Health Care.” Frustrated with fake conditions listed by employees, Dwight takes matters into his own hands, telling employees, “I'm now going to read aloud your submitted medical conditions. When you hear yours read, please raise your hand to indicate that it is real.”

Telling employees that they have “forfeited” their right to privacy, the episode lampoons the situation, but it's actually a pretty accurate representation of how difficult it is to manage the health form process.

Mistakes, complexity and endless back-and-forth

Most employees aren't going to make up fake conditions, but a majority of forms are missing information or have other errors.

Maybe an employee indicates he is receiving treatment for a condition, but hasn't correctly listed his prescriptions. Maybe another employee didn't know enough relevant details to fill out the form on behalf of her spouse. In many cases, the carrier will want more information, and there is a lot of follow up and back and forth between carriers, the broker, HR and employees.

Ultimately, HR teams and small businesses have a hard time getting this done. It's also a lot of work for the broker, who doesn't know whether the group is even going to wind up deciding on a self-funded strategy at the end of the process.

All this uncertainty and administrative burden creates a disincentive for brokers to pursue self-funding, even when it might be in the best interest of their groups.

Modernized benefits solutions

All of these inefficiencies illustrate the need for more modern health form solutions. Fortunately, from benefits administration to quoting, there are more tech solutions available than ever before to streamline every step of the group benefits process, including health questionnaires.

By bringing the health form process online, brokers can make this process less painful and more accessible for a greater number of clients and prospects.

Instant Insights /

The anatomy of a health questionnaire

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