5 things trailer builders can do today  to stop overpaying for health benefits

When COVID-19 swept through the nation, trailer builders saw demand plummet. And, as the pandemic plays out, many companies are still feeling anxious about being able to keep their employees on payroll.

The last thing manufacturers need is to be saddled with expensive, low-quality health benefits. Yet, that’s exactly the situation so many business leaders find themselves in.

Craig Clawson, owner of Clearwater, FL-based Magic Tilt Trailers Inc., has already embraced the new approach outlined below. He cut out opaque middlemen and worked directly with providers to establish fair payment agreements that grant discounts to qualified patients. In one example, thanks to fair payment, Magic Tilt received an 82.79% discount on a $14,855.36 ER bill. 

Only $2,555.37 had to be paid by the employee, a savings of $2,444.63 (160 hours of this employee’s pay) compared to an employee on a low-cost plan who would have been responsible for a $5,000.00 deductible. 

In 2019 alone, Magic Tilt saved over 20% in health insurance costs.

And now, other trailer builders can start saving money and providing better health benefits for their employees by following these five steps from Dave Chase, CEO and co-founder of an open-source blueprint for better benefits called the Health Rosetta.

1. Learn to be liberated from the status quo

Following in everyone else’s footsteps can be expensive, and in this case, costly. Though the “safe” status quo might be to purchase a health plan from a popular insurance carrier, if they want to see immediate savings, employers should cut out the middleman and pay directly for employees’ medical claims. By doing so, they’ll not only regain control of their health plan, but instantly save between 20%-30% of the cost of a PPO because they will have eliminated the fees those big-brand carriers charge.

2. Optimize health plan infrastructure

As liberating as it is to regain control, it can also be terrifying once employers realize what else is required of a self-funded plan. That’s why step two is all about finding the right help. That starts with a benefits advisor who is willing to disclose commissions—and, ideally, is familiar with things such as stop-loss insurance—as well as an unconflicted, carrier-independent third-party administrator (TPA). 

3. Carve out pharmacy benefits

Drugs are expensive, and even if they’re nearly the exact same, some are more expensive than others. Knowing what kinds beneficiaries most need so that the lowest-cost, highest-quality ones can be selected is key, but only possible if employers make sure that the contract they have with their pharmacy benefits manager (PBM) states that they own their claims data. 

4. Add value-based primary care 

The kind of care most of us experience today – long wait times, short appointment, plus multiple follow-ups and referrals – is a product of what’s called the fee-for-service healthcare system, in which providers are paid based on how many people come through their door, how often, and how many test/treatments/services their given while they’re there. Because the incentives in this system don’t really work in patients’ favor, a better alternative is for employers to find physicians that participated in a value-based system. By partnering with physicians who aren’t essentially forced to provide high-cost, low-quality care, employers will be saving money and providing employees with a better standard of care from the first interaction, which will reap dividends in downstream savings.

5. Leave behind value-extracting PPO networks 

Widely popular PPO networks often charge three to five times the amount they require Medicare to pay. And, they often tack on monthly fees per member. Reference-based pricing is a much more affordable, not to mention fair, option, in which a business negotiates a price for provider services/procedures above or equal to Medicare, but less than average paid by those with traditional healthcare coverage. As a result, employees are capable of getting the best care for the best price, and their employer is capable of seeing substantial savings – hence why many incentivize their employees to choose these contracted providers by offering waived copays.

Kim Eckelbarger is a Health Rosetta (healthrosetta.org) Associate Advisor and founder of Tropical Benefits (tropicalbenefits.com).