While much is said about employee engagement little is said about employer engagement, and yet to optimize a health plan the employer really needs to be engaged in the process and ask the right questions. Here are some sample questions for plan sponsors that currently self fund their health insurance or are thinking about it:

  1. Have you ever analyzed your claims experience by income cohort to see how the lowest paid members utilize the health plan differently from the highest paid? You might be surprised at what you find. Should your copays, deductibles, and out of pocket limit be reduced for the lowest paid members?
  2. Every year you set a price in your health plan for spouses and children. Do you know if you make or lose money on them at the prices that you set?
  3. It is commonly estimated that 30% of healthcare costs is waste. What have you done to reduce waste in your healthcare spend?
  4. Banks routinely have “stress tests” to see how they might fare in bad economic conditions. Has your plan ever had such a stress test? (No one would step off a ledge without looking to see if the drop was six inches or 100 feet, and yet too many employers will enter into self-funded arrangements without quantifying the true risk. Example, what will happen financially to the plan in following years if a hemophiliac is hired with ongoing claims of $700,000/year and no other stop-loss vendors will be interested in quoting?)
  5. In the above example, where the employer will likely be stuck with the same stop-loss carrier as long as the plan still has large ongoing claims, what due diligence was performed before “getting married” to that vendor?
  6. Expert second opinion vendors exist with some astounding results in the area of changed diagnoses and treatment patterns, such as canceling planned surgeries. This both saves money and improves lives. Have you looked into installing such a program for your employees, and how do you select the right one since they are all different?
  7. Would any employer provide all of their employees and their dependents a company credit card with an unlimited lifetime max? That is effectively what a self-funded plan’s employee ID card is. Isn’t it time to make sure that money is being spent wisely?
  8. If the largest Pharmacy Benefit Manager (PBM) Express Scripts can have a multi-billion dollar dispute with one of the largest health plans in America, Anthem, that says something about the complexity of Rx costs. When was the last time that your plan had a deep-dive look under the hood at its drug spend? You might be shocked to find what is discovered.
  9. Is Reference Based Pricing like the weather—everyone talks about it but no one does anything about it? Now is the time to learn the pros and cons, including the natural evolution of RBP into direct contracting with hospitals and other facilities.
  10. ASO versus TPA for your plan administration—there are real pros and cons to both. Do you know them?
  11. Have you ever set up different employer and employee contributions by region, based on the claims experience of each region? That can be easily analyzed and done if the desire is there to do that.
  12. Is being a plan sponsor of a self-funded health plan like playing God, deciding on who gets health care coverage and who does not? No way, you say, because you outsource all of that to the ASO vendor or TPA? It might not be quite that simple. Be sure you understand the reality of being a plan sponsor and fiduciary.