Why Your health insurance broker won't tell you about low cost health plans:
Fully adopted these plans can cut your health insurance costs in half...your broker is paid on a
commission basis.....and lower premiums mean less income for your broker.
Brokers often are paid hidden fees by insurance carriers...usually for retaining your business with
your existing insurance company...so they have an incentive to keep you with your existing carrier
even when a better alternative exists.
Don't get me wrong...many health insurance brokers are honest people providing a valuable service
helping sort out all the complexity of health care....but you need to be aware of their potential
conflicts of interest.
Why your health insurance company will try to talk you out of low cost health plans:
It is simple....they want to maximize revenue....this is true even of non profit insurance companies
(like some of the Blues). Non profit execs are paid based on compensation studies that are heavily
influenced by the size of the organization. Also, non profits like the control they have as large
purchasers of health care services....hospital systems are very dependent on health insurance
payments. Most non profit Blues executives truly believe they are the master planners of health
care that has just gotten too complex for any company or individual consumer to successfully
navigate (notwith standing the evidence to the contrary as seen in the Whole Foods example (here
is the link that explains how it works at Whole Foods.
Why most HR execs won't tell you about low cost health plans:
Most HR execs (and business execs) see the health care system as just too complex to figure out
and they depend extensively on the brokers as the intermediaries.
Low cost HSA based plans are very different and require careful introduction into the organization.
Most HR execs are more interested in keeping the employee relations waters very smooth and they
are afraid of stirring things up (generally this is a good sentiment, but it hinders taking advantage of
Companies need to nudge employees to take advantage of these plans. This is best done through
a combination of education and an adjustment of employee contributions so that employees see the
economic advantage of the High Deductible Plans.
How does an independent consultant for health care work?
First of all, we work with your HR leadership and your existing broker. They will often advise
against using us and they often need reminding by business leadership that they need to
cooperate. We know how to manage this relationship.
We will help you figure out how to introduce these plans into your organization. Usually the low cost
plan is introduced as one choice with financial incentives to employees who sign up. In certain
circumstances a business may choose to go "all in" and have the HSA plan as the only option....this
is rarely recommended as it is the most disruptive....but it can be done with huge savings right up
Will ObamaCare have an impact?
ObamaCare gives the government the authority to deem plans acceptable or not.....it is not known
at this time if they will allow the continuation of High Deductible Plans with Health Savings Accounts.
Here is a link to Vanguard...an excellent investment company with a unique structure
(owned by its investors).
If you'd like to discuss any of these matters call Paul at Pivot Consulting, LLC (no
charge)....we'd be delighted to hear from you. 607-725-0044