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Wisconsin Employers Rise to the Healthcare Challenge

analysis-charts-coffee-1446319As we kick off 2019 , the Integrated Risk Solutions, Inc. Benefits team takes stock of the value we delivered to our valued clients in 2018. Healthcare is not for the faint of heart, and we look forward to continuing to expand our next-generation management consulting process with our employer partners.

If you are an employer who has elected to offer healthcare as an employee benefit, we commend you. Your company obviously values your people, and you have made no small financial commitment—seeing as the average cost of offering healthcare was roughly $12,148* per employee in 2018.  It’s even tougher for middle market employers in the 2-499 space, where over 35% reported receiving a 10%+ increase in 2018.

Our team is passionate about challenging the status quo with curiosity and grit.

Why? Because all too often, we see good companies and great people fall victim to the great American PPO healthcare heist. Not only have the insurance community and the healthcare system conspired to increase premiums at annual double digit rates, but they have also made already high deductibles even higher. We do not believe employers should settle for a double-digit increase, nor do we feel that more costs can be transitioned onto the backs of employees who are already paying too much for their coverage.

For all of 2018, our Integrated Risk Solutions, Inc. client base leveraged our next-gen, multi-year strategies, as well as our communication, wellness, and compliance resources to reduce costs and keep healthcare premiums descending, flat, or in the low single digits. We saw more rate decreases in 2018 than in 2017 and worked with many employers to increase their benefit offerings to employees. In composite, the 2018 average premium increases among our client base are below;

  • Average fully-insured employer increase: 4%
  • Average self-funded employer increase: 4.9%

In 2019, we expect to see middle market employers continue to realize lower healthcare costs as a result of alternate payment methods, benefit technology, flex funding arrangements, and value-based pricing. Change is coming, and if your company is looking for a new approach to managing your benefit program, you can take control of your healthcare budget. 

A few other evolving macro trends for S.E. Wisconsin employers to watch:

  • Employers in the < 50 life market are moving to flex-funded programs to avoid community rating, reduce premiums and lower deductibles
  • Primary care only networks are expanding their geographic footprint and filling a considerable gap for high deductible programs and part time employees
  • Self-funded employers leverage bundled pricing solutions on both the workers compensation and health plan (savings achieved are used to increase benefits for leveraging available resources)

Achieving best in class outcomes is not a once-a-year meeting with your benefit advisor. Our team would like to hear your challenges and build a plan for your company’s successful Benefit program, which will help you attract and retain your greatest asset: your people.

* Mercer’s National Survey of Employer-Sponsored Health Plans 2018


Critical Trends on the Healthcare Front for Wisconsin Employers

Critical Employer Benefits and Healthcare Trends for Wisconsin Employers

The sun is shining for employers in Southeastern Wisconsin! Amazon has opened a new fulfillment center along the I-94 corridor, Uline opened a new warehouse in Kenosha, and soon Foxconn will also be putting down roots.

Add to the list the upcoming openings of Ikea and the new Bucks arena, as well as our exciting new streetcar system that will transport residents and tourists throughout our fine city. We’re looking at thousands of new jobs, large purchase orders, expansion loans, and new housing demands. Wisconsin employers are enjoying a business cycle that has not been seen in a long time.

As employers in Southeastern Wisconsin ride the wave of growth, how can you attract new employees to support your company’s demand? What are your strategies to keep your valued employees?  

We believe the answer lies within your benefits package. According to a recent employee benefits study conducted by Fractl, 88% of respondents would give either “heavy or some” consideration toward health, dental, and vision insurance when choosing between a high-paying job with lesser benefits and a low-paying job with better benefits.

While this is definitely good news for most employers, the downside is that healthcare costs are projected to increase by 2 times the level of inflation in 2018.

On July 26th, we’ll be hosting a seminar to take a closer look at how your organization can create a human capital strategy that attracts & retains talent—with a  focus on both hiring “smart” and engaging your multi-generational employees with a health plan they value and you can afford.  Read on for more information or scroll to the bottom to register!

In building an effective human capital strategy, the following four emerging trends will impact your company in 2018 and beyond.

Multi-Generational Talent Shortage

You inevitably have a multi-generational workforce that are serving the needs of your customers. We all do. Have you given thought to what these different generations value most in their benefit programs? We all need to. The competition for talent is real, and understanding who you employ and what they value has become strategic planning for many high performing companies.

What predominant generation do you employ? Millennials, baby boomers, generation Xers, or the evolving generation Z? What specific needs do these multi-generational segments value most? Knowing the answers to these questions is the first phase in structuring a benefit program that can attract and retain your greatest asset: your people.

Our seminar will discuss strategies your business can use to enhance the value of your benefit plan through structure and communication. This will make it more difficult for Foxconn (or others) to lure away your employees with a promise of a higher wage.

Rising premiums will impact your 2019 healthcare budget

In December of this past year, President Trump signed a tax bill that will ultimately repeal the individual mandate tax penalty beginning in 2019. How could this change impact your company’s health plan over the coming years?

urban-institute-2019-premium-increase-data A recent report by the Urban Institute estimates that the individual mandate repeal—combined with the expansion of short-term, limited-duration policies—will cause insurance premiums to rise by an average of nearly 20% in 2019.

The looming increase in premiums for the individual markets will impact employers in the 2-50 life market who are subject to community rating. If your company has less than 50 eligible employees, you’ll need a plan to address increasing health insurance costs as your premiums mirror the individual market.

Regardless of your organization’s size, your employee health plan is a great alternative to the individual market. Tax advantaged contributions through a section 125 plan, an expanded PPO network, and lower overall costs will lift current participation levels in your health plan in 2018 and beyond.

It’s time to develop a strategy for keeping this plan affordable so your employees are financially protected. The message to your CFO is to expect a larger percentage of employees participating in the company plan as the individual market struggles with affordability.

Expanded funding alternatives set middle market employers on a new course

Employers in Southeastern Wisconsin have historically had some of the highest healthcare costs in the United States on a per employee basis. As a result, local employers have been pushed to the cutting edge in adopting innovative programs around wellness, consumer driven plans, and narrow networks to minimize the year-over-year impact of rising costs. While these programs have had an impact, it’s time to put the insurance carrier market on notice that double digit increases are unacceptable.

The next phase in the evolution is underway as middle market employers are turning to flex funding, benefit captives, and self funding their health insurance programs. These funding alternatives can be a great strategy for controlling costs for your company and your employees, while mitigating certain taxes and profit margin components you would otherwise be paying to an insurance carrier.

Since a change in your funding arrangement can represent a new set of risks for the first time buyer, it is vital to understand some of the key concepts to determine if this approach is right for your company. Come to our seminar to learn some of the basic components to see whether flex/ level funding, benefit captives, or self funding might be avenues worth exploring.

Reference-based pricing (RBP) is on the horizon. Is your self-funded healthcare plan ready for this?

If your company chooses to self fund its health plan, implementing a fixed fee reimbursement schedule that is based on Medicare reimbursement rates can help to control medical costs. By using historical Medicare claims data, which is publicly available, your organization can partner with a Third Party Administrator (TPA) that will reimburse your employees, doctors, and facilities on a % of the Medicare reimbursement rates. This is an up and coming trend that has both providers and insurance carriers nervous. Come learn the answers to all the what, why & how questions your Chief Financial Officer may be asking in the not-so-distant future.

To register for our upcoming seminar on this topic, please fill out the form below! Or click here for more information. We hope to see you there.

Trump & Company Health Plans: How Wisconsin Employers Can Prepare!


In the aftermath of President-elect Donald Trump’s election victory, a top concern of business owners remains their relationship with the Affordable Care Act. For over 6 years, employers have adjusted to the financial and administrative requirements of the Affordable Care Act. As we turn toward 2017 and the first 100 days of Republican-controlled Executive and Legislative branches, what can we expect and how does this impact the path you’ve taken with your current health care strategy?

What should we expect?

President-elect Trump ran for the presidency on a platform to repeal the ACA. The details of this strategy have not been released, however it is fair to assume that we will see a repeal & replace that will likely transition over multiple years. The most controversial aspects of the ACA include the Individual Mandate, Employer Mandate, Premium Tax Credits and Medicaid Expansion.

Let’s keep two critical factors in mind as we set our sights on 2017: A full ACA repeal is not imminent and employer insurance is not going away anytime soon. Already, there has been Republican consensus on two aspects of the ACA that will likely continue to be a part of the fabric of an alternative solution:

  • Individuals with preexisting health conditions will not be denied coverage.
  • Individuals less than age 26 can retain coverage under their parents health care plan.

These aspects of the ACA have generally been regarded as positive and will likely be an integral part of an alternative Trump solution.

The recent selection of six-term Congressman and Orthopedic Surgeon Tom Price (R-GA) as the Health and Human Services Secretary gives us an indication of the knowledge and vision behind one of the most influential people to form our future health care policy. Price has introduced legislation every year since 2009 to replace the ACA. Price’s proposal is called “Empowering Patients First Act” and may provide clues regarding the future of the ACA under the incoming administration. In addition, Paul Ryan’s “Better Way” proposal identifies specific strategies around two key issues; Continuous Coverage and High Risk pools.

Short term expectations

Changes we can expect to see are freezes on enforcement and or the implementation of certain ACA provisions and regulations. In addition, we should anticipate a rolled-back enforcement of various mandates and other employer requirements. These Executive Branch actions are consistent with the President Elect pro business platform.

Congress can use the budget reconciliation process to make additional changes, but these are restricted to policies that impact revenue and expenditures, for example: The “Cadillac tax” on employers that was delayed until 2020 will likely be eliminated. More substantive changes to the ACA, like the Individual Mandate, Employer Mandate, Premium tax credits and Medicare Expansion, will require legislative action.

Ready, set, be prepared

Preparation is key and our advice is to continue to comply with the current system. This includes, but not limited to, distribution of your company SBC’s for employers of 50+ employees and continued compliance with the shared responsibility reporting requirements (forms 1094-C & 1095-C).

Now is the time to work with your benefit advisor to look around the corner and set a course of action that will enable your company to continue to offer a benefit program designed to support your Company’s employee attraction, retention and productivity efforts . A Trump health care plan will no doubt be viewed very differently from your company’s leadership team down to your rank and file employees. In addition, we should expect this uncertainty to influence the insurance markets in ways we can and likely cannot predict. However, access and affordability will continue to be key drivers in your strategic planning for a post Trump company health care program.

Interested? Let’s talk further

Integrated Risk Solutions will be hosting an employer seminar in March, 2017 to outline the early aspects of how the new health program will impact Wisconsin employers. For information on signing-up for the seminar, please contact us.

Is it time to consider self-funding your company’s health care benefits plan?

Winning in business is all about responding to change. New technologies. Inventory management. Customer service. However, the most successful owners, CFO’s and HR Directors will have their sights set on their greatest asset: their people. We have seen a lot of changes since the introduction of the Affordable Care Act, and it is now time to consider whether a fully insured plan is right for your business or if it is time to consider self-funding your company health care plan.

Average Annual Premiums by Firm Size
The Affordable Care Act will turn seven years old in 2017. Your company health care budget has likely increased drastically during this period. Does anyone feel good about an average cost of family coverage at $17,938? (Kaiser/HRET survey of employer health benefits 1999-2015).

In the Milwaukee area, we have seen many employers in the middle market of 50-500 employees maintain or decrease their healthcare costs through wellness strategies, consumerism initiatives, narrow networks and deductible/coinsurance drivers. These efforts have been rewarded (read: costs have been controlled). It is imperative to continually evaluate and adapt your health care plan, not only for costs savings but to remain competitive in attracting new talent.

But is this enough?

The competition is tough, budgets are stretched and you’ve likely seen an increase in participation in your employer funded plan due to one or all of the following:

  • The Individual Mandate and 2 years of tax penalties have your employees joining your plan
  • The local Medicaid offering (WI – BadgerCare) is tightening eligibility standards for working adults
  • Your corporate neighbor just introduced a spousal carve out (and just added another person to your plan in the process)

Is it time to consider self-funding your medical plan?

Investor Returns vs. Your CostsAfter all, whose interest does your insurance carrier really protect? Your employees? Your company? Or the shareholders of the insurance companies? With Health insurance companies providing skyrocketing ROI back to their investors, wouldn’t you rather put these returns back into your business?

A financing discussion is a “basic strategy” that positions the corporate health plan to participate in the claim experience of their own health plan. If you’ve built a wellness plan, rolled out a smoking cessation benefit and carved out spouses, who has really saved on the lower health care consumption? You or your health insurer?

Any employer with 50-200 participant employees should have a self-funding discussion with their benefit advisor. Is a fully insured approach still best for us? The ACA changed the game 7 years ago and we are seeing the early adopters evaluate alternative funding arrangements: domestic captives, stop loss insurance pools and self-funding have all moved downstream to the middle market employer.

The chart below identifies the employer “cost” components of every fully insured premium dollar versus the expenses of self funding:

Fully Insured Premium $ Comparison

Make no mistake, self funding will not benefit every employer. The process of transitioning from funding your benefit program on a fully insured basis to a self-funded platform is often times a multiple year strategy based upon the performance of your benefit plan, best in class PPO discounts and appropriate reinsurance levels. The takeaway here is that employers in the middle markets are starting to realize that self-funding lowers their overall healthcare costs while maintaining a competitive employee benefit program that will attract and retain your greatest asset: their people.

Earlier this year we released a blog detailing one self funded employer’s success in controlling healthcare costs over a 5 year period. The results are impressive and if you want to manage your employee benefit healthcare costs, self-funding may be a key element of your benefit strategy going into 2017.

Have questions on self-funding? We’re here to help. Contact us.

Expect More From Your Benefits Broker

2016: The year to re-evaluate your employee benefit packages

If any of us need reminding that we should plan for the unexpected, just look around.

2016 is already delivering the unexpected: gas is at $1.37 per gallon; Donald Trump is a leading republican candidate; the Dow Jones is down 2,000 points; and a 39 year old quarterback just won the Superbowl.

“Just look around” is advice we often give to our prospective employee benefit customers. While it may seem like there is no relief in sight with increasing healthcare costs, keeping an open mind might lead you to cost savings, increased employee satisfaction, and overall great value. Let’s take a closer look.

The Affordable Care Act (ObamaCare) turns six this April. There are 18 million individuals enrolled in the public exchanges. For the first time in history detailed health care reporting will have to be filed with the IRS and we will receive 1095’s to confirm health insurance on our tax returns. Without question, the last six years have brought about more health care reform since Medicare rolled out in the 1960’s.

The Affordable Care Act may be viewed as anything but “affordable”, but our advice is to “look around” for a better solution, get in touch and/or consult your benefits advisor, and work together to create a better outcome for you, your company, and your employees.  You’ll be surprised what you can achieve.

Lower healthcare costs can happen

35% of Integrated Risk Solutions employee benefit clients experienced lower costs in 2015, as a result of our multi-year strategic process. According to the most recent Kaiser survey, annual premiums for employer sponsored healthcare was $6,575 for single coverage and $18,469 for family coverage in 2015. If your company employs 100 people then your annual healthcare cost is likely in excess of $1,000,000 and continually growing between 6-8% each year. What does this additional $60,000-$80,000 do for you? Does it make your team more efficient, productive or even happier? Has your benefit advisor “advised” you to plan for cost increases

Sustainable healthcare is a business strategy 

If you are a middle market employer who thinks big, you’ve likely built a multi-year strategy around healthcare consumerism, defined contribution planning, and wellness to impact your employee culture. Successful companies build on this with the awareness and respect for the complex employer compliance mandates and the related challenge of communicating change onto your company’s greatest asset; your employees.

The tactics that large employers deploy are readily available to middle market companies that expect to achieve greater outcomes. Often times clients report that their benefit advisor did not make them aware there was anything better than “trend.” Don’t let your company fall victim to poor “advising.”

Multi-year benefit strategy meets Affordable Care Act

Below is a 5-year illustration of one local employer’s success in lowering the cost of healthcare.  This study, just completed in January, compares an employer’s actual self-funded claim costs to a fully insured plan trended forward as reported in the 2015 Annual Employer Survey of Healthcare Trends published by Mercer.

5-Year-Chart (2)

Over the course of five years, the employer measured the annual cost of their self-funded plan versus a fully insured “ghost” plan that had the same initial cost in 2011. The annual per employee cost was 36% less than the fully insured per employee costs.  Over the course of 5 calendar years, and despite increased cost pressures of the ACA, this employer had no plan design changes while making a healthy contribution into an employer funded health savings account.

The savings experienced by the self-funded plan exceeded $1,062,118 over the course of this 5 year term. 

As you can see, having the right team advising your company on employee benefits can make all the difference. Review our Expect More From Your Employee Benefit Advisor checklist to see how Integrated Risk Solutions takes a unique approach to the challenges of employer funded health care.

Integrated Risk Solution’s mission is to protect the security and profitability of leading professional and commercial clients helping them to achieve their business objectives.
Contact us for more information.