Employers are increasingly providing employees with a competitive benefits package that includes health insurance as a key method to not only attract but also retain top talent. One core challenge that they continue to face is the need to strike a balance between securing high-quality insurance that is also cost effective and within their established budget. This has been increasingly difficult, especially with the cost of health insurance rising year after year.
To secure an effective health insurance plan that ideally meets both their needs and those of their employees, it's essential that employers keep a tab on the latest trends in the ever-evolving insurance landscape (to stay informed, follow these Top Health Insurance Feeds to Follow on Twitter). Global health Insurance advisor Pacific Prime’s recent report on the top international private medical insurance (IPMI) trends for 2016 (learn The Key Differences Between Local and International Health Insurance) provides important insight into this year's trends, collated from six industry veterans, including:
- Robert Lang, Managing Director at Bupa Global
- Kevin Melton, Sales & Marketing Director at AXA International Health Business
- Steve Conway, Regional General Manager at Allianz Worldwide Care (Asia)
- Mike Che, Associate Director & Business Development at Cigna Worldwide
- Kapil Dhir, Chief Compliance Officer at Aetna International
- Steve Clement, Lead Benefit Consultant & Human Resources at Aetna International
This article provides an overview of the four major trends identified in Pacific Prime’s report.
Trend 1: Implementing Cost Containment Measures
All insurers agreed that implementing cost containment measures is an important way of ensuring that the health insurance plan is successful and efficient. Two of the most prevalent strategies being:
- Beginning with a Request for Proposal (RFP) process: The RFP process essentially involves defining your needs and reviewing insurer proposals. A strong RFP can provide clarification for all stakeholders, set expectations, identify any potential plan risks and concerns, and identify premium and coverage sensitivity.
- Better management of health care providers: To provide a more cost-efficient plan, better managing the provider network is a key strategy for negotiating better prices. According to AXA’s Kevin Melton, “proactive use of dedicated case management can help to review and offer a change in diagnosis which can minimize unnecessary treatment, and provide options for more appropriate treatment and procedures – typically resulting in less invasive and less costly procedures."
Trend 2: Management of Benefits
There is a growing trend towards employers introducing and trimming various coverage elements in their employee health insurance plans, with two major actions being:
- Refining existing elements: There were two coverage benefits indicated as having strong trends: maternity and wellness coverage. Maternity coverage tends to come with higher premiums, so there is a trend of companies increasing caps on the amount claimed to contain costs. Wellness coverage, such as introducing preventative health programs (e.g. nutritional education), is also seeing a rise in demand.
- A shifting focus to value-added services: There is now a growing trend toward providing health plans with value-added services that go beyond traditional benefits, including a range of assistance and intervention services (e.g. providing regular health advice). Allianz’s Steve Conway pinpointed this trend by commenting that “everybody can provide health insurance, but we want to see what additional services can now be supplied.”
Trend 3: Integrating Technology
Insurers are increasingly integrating technology for a variety of products and services, which also has an influence on the success of employee health insurance plans. The most requested technical elements include:
- Portals: Cigna’s Mike Che revealed that "The online platform is always important so that HR or plan managers can have a user-friendly platform from which to manage or administer their plan.” Pacific Prime predicts that portals will become increasingly customized.
- Mobile apps: The effectiveness of portals has led to the emergence of mobile apps, and Aetna’s Kapil Dhir believes that it will “play a major role in health insurance related technology demand.” Including features like "find an in-network provider near you" will play a major role in cost containment measures, focusing on the selection and limitation of provider networks.
- Claims and plan data: Bupa Global’s Robert Lang noted that “We are seeing companies request data for many different aspects, including everything from service standards to quality outcomes to health care costs to even claims habits." As data management becomes increasingly sophisticated, claims habits will likely be more effectively predicted, leading to a more cost-efficient underwriting process.
Trend 4: Working with Regulation
As markets become increasingly regulated, it has become more important to ensure that employees have coverage that is compliant and portable. Employers that provide international plans alongside regional or local cover will need to be aware of changing regulations in the different local regions. Cost savings can be realized by having compliant plans, since this will help reduce long-term management costs while keeping employees sufficiently and legally covered.
Pacific Prime predicts that there will be a higher demand from employers that want to work closely with insurance advisors and insurers to ensure that they are delivering cost-effective, high-quality plans that meet the coverage levels demanded by employees.