Risk management is a term usually thought of when dealing with liability or worker’s compensation insurance. It’s usually not brought up or thought of when dealing with group health insurance. Risk management in general yields fruits in most aspects of life and business. The same can be said for implementing risk management in your group health insurance strategy. Doing so yields many benefits; group health insurance renewals remain low and steady year after year, year end claim surplus can be used to lower following year rates/costs or used to increase employer premium contribution, making employees think twice before leaving.
How is it possible to keep health insurance renewals steady year after year when medical care inflation is at an all time high? Auto dealerships that have implemented a self funded with stop loss strategy have been able to do so. The self funded plan chassis allows for cost control, risk management and potential claim surplus. This is a long-term strategy. A good broker and third-party administrator (TPA) are needed for effective plan set up and administration.
Self funded with stop loss plans have gained popularity over the last couple years. Many benefits brokers and third-party administrators are able to implement and run these plans effectively. It’s rare however to find anyone that effectively implements risk management into the day to day management of these plans, reducing overall claim exposure. Effective risk management enhances all the fore mentioned benefits of self funding; year end claim surplus is substantial, renewals remain steady and are likely to decline.
Managing risk inside a self funded medical plan legally and effectively can be tricky. Not many TPA’s nor brokers are set up to do so. As mentioned earlier, dealerships who have implemented a self funded with stop loss strategy have been able to gain cost control over health insurance costs. Dealerships that have implemented this strategy along with risk management have been able to go above and beyond gaining just cost control. It’s worth researching and selecting the proper broker who can quarterback this effort and who understands how auto dealerships function. The benefits of doing so are substantial, yielding long-term fruits and savings year after year.