In our rapidly changing world, innovation is no longer just a buzzword and instead has become part of the everyday business vernacular. For the healthcare industry in particular, innovation is the name of the game these days with the ACA driving creative entrepreneurs to develop increasingly progressive and transparent options – resulting in better and more affordable healthcare. For traditional brokers and insurance carriers who have been in the game for decades, there is a sudden urgency to get on board or get off the train.
Similar to the telecommunications and entertainment industries, new players to the healthcare game have shaken up the way we do business by cutting out the middleman and all the cumbersome – and unnecessary - extras that drive up prices. Instead, companies like Zenefits, Zane, and Collective Health are replacing traditional healthcare brokers by using technology and service-oriented approaches to offer transparent solutions, online self-serve capabilities, reduced costs, and improved benefits.
In addition, new methods of funding health coverage for small to midsize organizations are taking shape, providing opportunities unheard of in the days of traditional healthcare. In particular partial self-funding is becoming a viable option, especially for nonprofits that are struggling to maintain tight budgetary bottom lines. Partial self-funding removes many of the risky financial obstacles that have previously prevented smaller organizations from taking advantage of self-funding. In addition, partial self-insurance allows for greater premium savings and reduced out-of-pocket costs.
Partial self-insurance also provides a unique opportunity for nonprofit employers to pick-and-choose the healthcare services that benefit their employees the most – providing better compensation packages for retaining talented staff. This is in sharp contrast to prior approaches of having to purchase the whole package, regardless of need, from an insurance carrier. The pay-for-use model offered by partial self-insurance allows organizations to customize plans from a lengthy list of options (e.g. alternative care, infertility treatments, dependent coverage) while also ensuring major medical coverage from an insurance carrier.
While the ACA has certainly brought on some challenges for employers, it has also opened our eyes to the mishandling of healthcare in the past. We now have a much clearer picture of why transparency and consistency are needed more than ever. As we mark the start of open enrollment for 2016 this month, it’s worth considering if your current health coverage options are serving your organization – and employees – in the best, most innovative way possible.
For more information on partial self-insurance, download
the Nonprofit Executive's Guide to Partial Self-Insurance
The information and materials herein are provided for general information purposes only and are not intended to constitute legal or other advice or opinions on any specific matters and are not intended to replace the advice of a qualified attorney, plan provider or other professional advisor. This information has been taken from sources believed to be reliable, but there is no guarantee as to its accuracy. In accordance with IRS Circular 230, this communication is not intended or written to be used, and cannot be used as or considered a ‘covered opinion’ or other written tax advice and should not be relied upon for any purpose other than its intended purpose