Stability, Benefits Plan Rates That Are Stable & Predictable

Small and mid-sized business owners face a lot of uncertainty and don`t need that to include their employee benefits plan. A local Chambers Plan advisor can help show why the Chambers Plan is the number one plan for businesses seeking stability in their benefit plan.

Why should this be a concern? First, inflationary factors can cause a benefits plan to rise. Next, some group benefits providers lure businesses in with unsustainable rates which are followed by larger premium increases in subsequent years. Many business owners have experienced this roller coaster ride already.  We can show you how to avoid that.

Let’s talk first about the low rate trap. Most benefits providers are for-profit entities where logic dictates they need more premium than claims paid out, plus the administrative costs and profit for shareholders required to run the plan. In addition, many require funding for their own large claims pool to pay larger claims than normal; typically large drug or out of country claims. If they lower their rates below what they really need in order to entice you to move your benefits plan to them, they have no choice but to make up the rates on each renewal to return your plan to a profitable level. If they couldn’t do that they would have more expenses than income and they would run plans at a loss; not a good practice for a business.

One of the great things about the Chambers Plan is it allows start-ups or smaller firms to participate fully in the pool if they have 3-9 employees, though some 1 and 2 person firms may also qualify. If they are fully pooled they join the other 30,000 businesses where renewals are based simply on what’s needed to sustain the pool. This keeps costs predictable until they grow to a size where they can take on additional risk. If they had a bad year for claims due to an employee or employee’s dependent it won’t impact the renewal the way it would if with a traditional carrier.

In addition, as they grow they can move into the Chambers Plan’s partially pooled option. With this the firm takes on more risk since a portion of claims will be rated against premiums, though for taking on that risk they get reduced rates. As the Chambers Plan is a not-for-profit program, surpluses go back into your claims and provide reduced rates.

Other factors that can increase benefits rates are generally visible and we’ve all seen some news item on such as: inflationary pressure from the benefits themselves, benefits fraud, poorly managed plans or plan designs, high claims or employee usage. Many of these things can be managed through a good benefits advisor. The Chambers Plan has many plan designs built around cost containment with the intent of being stable and renewable.

One of the clearest areas of stability management problems are prescription drugs which can be the highest contributing factor to a plan cost and inflation. The Chambers Plan utilizes a Managed Health Care system that allows for coverage on a two-tiered level. Many new high cost drugs contain the same medicinal base as a lower cost therapeutic equivalent. If an employee chooses not to manage their cost they would simply get coverage at a lower percentage. If they choose the more cost-effective option they would receive a higher level of coverage. In addition, caps on total drug limits per-person, per-year and coinsurance levels can help keep costs in-line.

Other benefits like paramedical coverage and dental can also be managed through limits and coinsurance levels. The use of benefits like a health care spending account can add flexibility to these decisions and choices. Working with an advisor can help you build a plan most suited for the demographics of your organization.

The last thing a business owner needs is a surprise. By ensuring your benefits plan is best suited to your firm and to your employees you can avoid things like that. No one needs the stress of having to move your benefits plan each year due to underfunding to sway you into moving.  Get real benefits for your business that will renew each year for you in a stress-free way. Let the Chambers Plan worry about your benefits plan while you focus on your business. Visit today for more information.

January 21, 2019 12:05 pm

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