health insurance services
case study:
ICHRA to the rescue
a health insurance plan spiraling out of control!
about the company
industry: long-term care
size: 150 employees
group insurance plan offered:
large group fully insured with HSA
employer/employee premium share
A long-term care facility’s group insurance plan for its employees was suddenly drastically impacted by a SINGLE chronic claim. This is a common case for many employers, often resulting in the dreaded annual “juggle” surrounding company health insurance costs! Every year they were either paying more, changing carriers and plans, limiting coverage, shifting more cost to employees, or a combination thereof.
They NEEDED intellicent knowledge of the latest trends to get them back to being financially sound. Take a look at the journey this employer took with us that resulted in more choices, but also allowed additional funds for added benefits. All the while, equally increased employee retention and recruitment…
2018
It all started with a high claim that was set to repeat year after year after year…
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133 eligible employees
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Fully insured with 97 employees enrolled
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$1,008,948 total health insurance spend, with employer/employee premium share
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Employer / employee HSA funding
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$800,000 chronic condition recurring claim arises
2019
The recurring large claim led to a crushing renewal, making the plan unaffordable for employees from both a premium and out-of-pocket risk standpoint…
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49.1% renewal increase, pushing projected cost to $1,504,431
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Plan design changes lowered renewal to a 36.6% increase, for a $1,376,061 projected total spend
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Enrollment fell to 71 due to significant premium increase, resulting in a projected total cost of $1,102,344
2020
Another devastating renewal, but ICHRA saves the day for both employer and employees…
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Individual Coverage Health Reimbursement Accounts (ICHRA) become legally available to the group
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Group insurance renewal projected an annual total cost increase to $1,416,020
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Moving to the ICHRA approach lowered the total annual health insurance spend to $458,000, saving the employer and its employees over $950,000 for the year
2021
Individual policy pool renewal went up 7%
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Employer raised its premium share 7%
the intellicent results...
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A health insurance benefit became economically viable for this employer
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Transferred the ever-increasing risk of higher group insurance premiums to the individual market’s much bigger pool of covered individuals
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Guaranteed issue individual policies solved the $800,000 chronic condition recurring claim problem
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Employees have much more plan choices among numerous carriers, with HSA options still available
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Employer premium share still tax deductible
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Employee premium share remains pre-tax
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Dramatically reduced the probability of the dreaded 25+% annual premium increase