Let's Wait and See What Will Happen With The ACA

Fear can be a strong motivator, but is it ever best to be solely led by it? Can company leaders make sound decisions by avoiding issues or just 'waiting things out'? It isn't likely. Decisions based upon evaluating marketplace data, responding to existing ACA mandates, and defining objectives with a transparent health and welfare professional is always the most prudent course of action. Do nothing and pay more is not a strategy Prosperity Benefits would recommend.

Let's consider the principal of opportunity cost in a typical scenario. Employer XYZ has had the same healthcare plan for years and is advised year after year to 'keep what they have' by their broker. The broker knows that as long as they provide adequate service and keep their same medical plan that the client will not likely find a reason to hire another consultant. For the broker, this is a great scenario as they have used fear as a motivator to make the client think changing may be the worst thing they could ever do. Employer XYZ, unless they listen to other, more compelling and logical approaches, may think they have the best plan because it is 'grandfathered'. Whether the plan actually is or isn't grandfathered is another conversation altogether. We are looking at the issue of Opportunity Cost for this employer in that they will voluntarily choose to forgo savings, plan improvements, wellness initiatives, carrier negotiations, or general program enhancements for what they believe is already the best course of action. Employer XYZ has been conditioned to be afraid of change, so they pass up the opportunity for something better.

The truth is, many positive changes in the marketplace have occurred as a result of the ACA. Regardless of what happens in the future, it is always the absolute best course of action to ensure health and welfare plans are benefit, compliance, technology, and most importantly, cost-optimized for the organization for the upcoming period. Every 12 months brings an opportunity for improvement, but it is wise to adhere to a multi-year plan that is designed to help an employer beat the medical trend when it comes to price increases. Our carrier partners have become increasingly more creative in the small group market especially by scaling down self-funded solutions to help companies that are in general healthier than their peers. If a company is healthy and has young average age, they can enter the self-funded market and save between 15 to 40% or more on premiums. These are incredible savings for employers and this industry has boomed in part due to guaranteed-issue fully-insured premiums rising year after year. Prosperity Benefits is led by a Certified Self-Funding Specialist, and has worked to transition dozens and dozens of companies to this structure. Of course, each client has a unique set of needs and self-funding may or may not be the best option. The difference is, we will advise you using actionable data, not vague objections regarding the validity of either approach. "Self-funding is risky" is a phrase many uneducated consultants love to use.

Ultimately, each company must decide if they believe they are getting the best advice and are making the best use of their dollars by analyzing real data. Those stuck 'waiting' on ACA changes may find themselves paying thousands or hundreds of thousands more than they should in medical premiums in vain. "Let's wait and see" is not a winning attitude when it comes to managing the 2nd highest employee-related expense item in a company!