Changing plan designs is an incredibly tough decision for an employer. It’s
hard to know how changes will impact the overall budget. However, sometimes
plan design changes are necessary to manage costs, particularly when cost
drivers could be reined in by adjusting plan specifics.

Employers also need to consider how plan design changes will affect current
and future employees—providing a quality benefits plan is of vital
importance to attract and retain quality employees.

The best solution to this problem is to engage in plan modeling. Plan
modeling allows managers to determine the best use of resources and to
engage in experimentation without taking on risks.

ABM Insurance & Benefits Services is your Texas business solutions provider.

Insurance Benefits Plan Modeling

Plan modeling makes it possible to ask various questions regarding how
claims would have been paid differently given a modified design.

Many employers start this process by looking at historical claims data and
conducting claims analysis to identify problem areas in their health plans.
With the results of the analysis, employers can explore potential solutions
for lowering costs. (For instance, if emergency room costs were
disproportionately high, an employer could consider raising the emergency
room copay.)

Even if you are just thinking about making plan design adjustments because
you suspect it would drive better claims results, the use of modeling can
help you test-drive those changes before implementing them. The results of
the modeling will help you see the outcome of suggested changes to your
current benefit structure.

• Deductible and coinsurance structure
• Office visit vs. specialist copay
• Urgent care vs. ER copay
• Different model of health plan (experimenting with an HSA plan, for
  example)
• Prescription drug tiered rate structure
• Increased efforts at utilizing preventive care

With access to all the data provided by plan modeling, employers are able
to uncover ways to help control costs. By viewing how much money new
strategies have the potential to save over time, employers eliminate the
risk of benefits missteps, like implementing drastic changes to popular
benefits offerings. With these data points, an employer can make educated,
strategic decisions that balance its financial benefit with its employees’
needs. Some models even illustrate how many employees will be affected by
each change, allowing employers to truly balance value and cost.

For most employers, identifying and managing even just a fraction of their
costs can generate significant savings. That’s because the smallest
percentages of identified high-spending areas represent the most promising
potential for savings.

The better the model, the greater the potential for cost savings. The more
models employers run, the more likely they’ll find hidden ways to curb
benefits costs. Employers are free to consider novel and cutting-edge
changes to employee benefits without having to wait until after
implementation to measure success. In a burgeoning, costly area where
employers are trying to limit expenses, plan modeling programs are
essential.

Contact ABM Insurance & Benefit Services for more information on how to
put plan modeling to work for your office.  Call us today 281-448-3040!