Using Beacon to recommend a fully insured health benefits plan

Fully insured health benefits plans are a popular option for small and medium employers because they’re easy and predictable. Many employers are willing to pay more for this ease: there’s no administrative burden or effort and they are fully protected in case of high-cost claims.  

Brokers who advise small groups know how expensive these plans can be. This is because it is difficult to know how the plan will be used for the coming year. Employers simply do not have a full picture of what benefits they need before planning because there is not enough information on their employees’ needs.

What is a fully insured health benefits plan?

A fully insured health benefits plan means the employer pays a fixed cost, or premium, to an insurance company for coverage. Unlike a self-funded or level-funded plan, the insurer is on the hook for claims (in those funding arrangements, the employer is responsible for claims). 

In exchange for this premium amount, The Insurance Company or Health Maintenance Organization (“HMO”) assumes the risk.

Why should an employer opt for a fully insured plan?

There are a variety of reasons to opt for a fully insured plan over a self-funded or level-funded arrangement even though it may be more costly. For example, if the employer group is smaller than 15 employees, or if the employee base is unstable with higher turnover, a fully insured plan makes more sense. Additionally, if the employer does not have an established cash flow or has a weak balance sheet, it is better for a third party to pay the claims directly. Finally, fully insured plans make sense if your employee population has any known high-cost conditions.

How can you use claims data to plan for high-cost conditions?

Brokers have relied on employee-completed health questionnaires and demographic details to help inform if there are any high-cost conditions, but there are significant gaps in this approach which leads to higher costs. Underwriters rely on demographic factors to assess risk, which results in a wide range of possible outcomes and therefore is difficult to price. Often, small groups overpay for a larger policy than what is necessary because there is no direct claims history for how the plan has been used.

How can brokers have the insights to confidently advise sticking with or switching to a fully insured plan?

Without the claims data, fully-insured companies (particularly small and medium-sized businesses) are left in the dark about how their plan is used, making it next to impossible to decide if they should remain fully insured or offer multiple plans. Amid rising inflation and a crisis for new talent, employers are adding more pressure to their brokers for healthcare claims technology and more insights about how their benefits are being used. 

Recognizing the need for claims data to make informed planning decisions, we launched a new new product for brokers, Beacon. Using Beacon, brokers can have access to small group claims data for any group they advise and regardless of the funding structure.  

How to get small group claims data with Beacon

Brokers working with small and medium-sized businesses can get an accurate picture of how their health plan is being used with Beacon by TPA Stream. In less than 30 days, the broker will have a full picture of medical claims for any group. The process is simple: 

• Employees enroll to provide their claims data 
• We harvest the claims and they’re securely housed in a HIPAA-compliant, SOC II Type 2 database. 
• Once you as the broker are happy with the enrollment, you can access reports like the Small Group Risk Assessment report which summarizes the twelve risk factors underwriters use when assessing a group. Other reports include the detailed claims report and summary claims report, among others. 
• The data is exportable for further analysis, allowing unprecedented accuracy with plan creation and stop-loss quotes

What’s next: 

Access to claims data for clients of all sizes is within your reach with Beacon by TPA Stream. We’d love to show you how. Request a demo here.

Related:

• Whitepaper: Learn how small group claims data helps you more accurately assess a group’s needs and sets you apart
• The Employer’s Guide to Self-Funded, Level-Funded, and Fully Insured Health Insurance
• Broker’s Biggest Problem: Missing Small Group Claims Data 
• Healthcare claims Data is Becoming an Expectation and is Possible
• What Can Employers Do to Lower Health Insurance Costs?
• Self-Funding: What’s Claims Data Got to Do With It?