At a conference late last month, I witnessed a trend we’ve been preparing for: For the first time, presenters on the mainstage were discussing the importance of self-funded alternative health plans.
It feels like we’ve been telling the industry for years about the importance of dynamic copay health plans. But before the Council of Insurance Agents & Brokers' Employee Benefits Leadership Forum, I’d rarely heard conference speakers acknowledge what we knew was true: to bend the healthcare cost curve in any substantive way, the industry needs to begin scaling alternative health plans. And fast.
It all makes sense because the custom health plan is something that more and more insurance brokers want to provide their clients. Every employer group has unique workforce demographics, utilization patterns and budget constraints. For many plan members, the status quo health plan just doesn't seem to be cutting it. Insurance brokers heading into renewal season are demanding creativity.
Historically, as each insurance renewal approached, insurance brokers searched for innovative self-funded benefit strategies to create measurable value. This health plan creativity meant engaging in direct contracting with centers of excellence or perhaps using a variety of providers – direct primary care, telemedicine and the like. But none of these truly reduced the ballooning healthcare costs employers faced.
Alternative health plans go beyond these systems, enabling custom-built health plans.
The non-traditional plan discussions continued in our conversations throughout the day, where benefits professionals would bring up alternative health plans as something they were thinking about before we even had a chance to. What I noticed is that, while it was by far the most common conversation, everyone seemed to define “alternative health plans” slightly differently.
During the conference, I heard three broad definitions of “alternative health plan.” These plan structures are all based on steering patients toward low-cost, high-value care, but achieve that goal in various ways.
Tiered network with variable copay: By tiering providers into categories (cost, quality, efficiency, negotiated rates, etc.), self-funded employers steer members to desired providers while allowing for some choice. How does this work in practice? A visit to a Tier 1 provider wouldn’t require a copay, but if a member wants to see a Tier 2 provider, it would cost $50, for example.
Tiered network with HRA to drive steerage through financial incentives: This is a similar approach to the first category of alternative health plans, but here the employer funds an HRA account to be used on preferred providers.
Traditional network structure with Center of Excellence: Think of this as “normal healthcare” with a few special arrangements for high-value providers. Employers directly contract with these providers (Centers of Excellence) for a few high-cost procedures.
As employers push their brokers for alternatives to traditional self-funded health plans, insurance carriers and third-party administrators (TPAs) need to design more flexible benefit offerings.
Handl Health enables carriers and TPAs to accelerate the development and launch of variable copay health plans focused on encounter- and episode-based care. By leveraging healthcare price transparency data and provider performance analytics, organizations can create provider-tiered benefit designs that align member incentives with value-based care objectives.
This approach allows large and small carriers to move beyond traditional network structures and offer innovative health plan products that support both affordability and member satisfaction.
At Handl, we’ve been helping carriers design the non-traditional health plans that brokers are asking for and employers are demanding. And we’re showing them how to develop and activate these new plans in months, not years. Together, we’re moving patients toward new plan designs and other custom configurations that prioritize low-price, high-value care.
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