Understanding health coverage instability

Construction companies that either don’t provide healthcare to their employees, or do and their employees don’t participate on the employer sponsored plan, can pay nearly double in workers’ compensation costs.

The reason, employees who don’t have access to healthcare, in desperation, frequently turn to the employer’s workers compensation plan as a means of paying for healthcare. Unfortunately, we see this trend often referred to as “Monday morning claims syndrome.”

To further exacerbate this problem, many in the provider community, help fuel shifting a potential healthcare need being paid for by the workers’ comp plan, by guiding employees to agree that their medical need might have been work related. You see if it happened at work, then the employee’s off the hook, no-copays, no-deductible and the provider attaches to the employers workers comp plan.

When the workers comp plan is used not only on the medical costs but also time out of work the result is the employers Experiential Rate (EMOD) rate increases and the employers insurance premiums on the workers compensation plan increase exponentially.

I’ve seen in many instances, workers comp premiums with companies not offering their employees meaningful excess to medical care, go from $100 per employee per month to $300 per employee per month when an employers’ sponsored healthcare plans participation erodes due to rising cost and sky-high deductibles. When employees have nowhere to turn, the workers compensation plan becomes their defacto healthcare solution.

For many construction companies, the rising cost of providing traditional health insurance plans is the real issue. Not only are the monthly plan costs rising at an unsustainable rate, but the cost for an employee to use the plan is completely out of reach. Let’s take an example of an employer sponsored plan where the employer is contributing 50% of a $500 per month rate (for a single employee)—the monthly cost to an employee is $250/month. While that may seem within reach for some, the reality is that the average American worker earns about $15 per hour.

That means to pay the monthly premium, an employee would spend over 10% of their income (before taxes) on purchasing the plan. Now here’s where it gets even worse, that plan carries a $5,000 deductible, so before the employee receives any meaningful benefit he or she must come up with a significant out-of-pocket before there is any benefits. In this strategy, the employer sponsored plan is both expensive to buy and expensive to use, an increasingly number of employees just opt out—the math just doesn’t work.

How to construction companies can deliver healthcare
New patient-focused plans built around primary care are delivering meaningful access to healthcare for employees, at a fraction of the cost of traditional insurance.

Right now, employers of all sizes are leveraging the structure of ERISA and a new breed of innovative self-funded healthcare plans that best fits their employee populations and gaining control of their healthcare plan. While self-funding is not a new idea, it has been come more accessible than ever to small and medium size employers delivering lower-costs and a significant hiring and retention advantage—and of course lowering keeping those E-MOD scores low.

In a recent national survey, 40% of Americans hadn’t seen a doctor in the last 12 months due to the cost, and another 32% skipped a necessary prescription due to the price.

As you craft your plan make sure your including these critical components to ensure success.

  1. Deliver initial access to care 24/7 to employees digitally. This can be via phone, though an app, text or even video. Easy and low-cost, the goal is to remove the barriers of time, money and transportation to care. Make sure the provider can communicate in your employees’ native language as this can also be a barrier to those who need care.
  2. Work with a solution that addresses your 10%. These are the folks who need a proactive approach to chronic and acute disease like diabetes, high-blood pressure, asthma and the like. By anticipating need of these people that need a little extra help, you can avoid high-cost care in the hospital.
  3. Engage in a healthcare plan based on $0 cost for primary care, breaks through the barriers of accessing healthcare for an employee around time, money and transportation. Plans that deliver Adding low-cost high value services like $0 copay for chiropractic care is another meaningful benefit that keeps employees out of sights of potential opioid abuse and invasive surgery.

By shifting to a self-funded strategy, employers report a savings typically around 20% to 30% and are delivering access to basic healthcare benefits to their employees with little or no out-of-pocket costs. But for employers who provide nothing, or employer whose low wage employees cannot afford the product they provide, self-funded plans can offer minimum services to those lower wage workers that provide them access to the medical care they will use, reduce workers’ compensation costs, increase productivity and help drive recruiting and retention.

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Paul Johnson is co-founder and CEO of Redirect Health. He helps oversee operations and identifies new opportunities that support the company’s efforts to offer employers affordable, high-quality healthcare.

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