Pub. 13 2014-2015 Issue 4

N E W J E R S E Y C O A L I T I O N O F A U T O M O T I V E R E T A I L E R S I S S U E N O . 1 , 2 0 1 5 18 new jersey auto retailer you can leave the program without any additional costs or penalties. Fi- nally, traditional insured networks such as Aetna and Cigna are read- ily available in the Level Funded market. What makes Level Funding different is that “behind” the premium billing, the plan is priced and operates as a true self-insured program. Typical self-insured expenses can be broken out into three categories; ad- ministration, reinsurance or stop loss, and claims expense. Level Funding combines these three components into billed “premium equivalents” that level out annual costs over the year, into equal monthly premium payments. This can be a cost savings strategy for groups with good or even average experience that might be subsidizing groups with poor experience due to community rating. Generally, groups with fewer than 100 covered lives are community-rated and the pool of employers in that “community” likely includes some with higher than average claims utilization. Level Funding allows groups under 100 to stand on their own, and avoid the negative impact of groups with bad experience. Wellness Programs Wellness programs are seeing much higher adoption rates than in the past. One reason is that these programs have demonstrated a positive impact on premiums and renewal increases. Wellness programs exist in varying degrees of complexity and employee involvement. On one hand, an employer might encourage employees to take an online health risk assessment by offering a $10 gift card to partici- pate. This might be done simply in hopes of an employee getting feedback on his current lifestyle and risks. This limited approach to wellness is not likely to have much impact on premium, but could be viewed as a way to improve employees’ lives. On the other hand, an employer might take on a more complex wellness approach that asks employees to get biometric screen- ings and meet AMA specified gender and age based screenings. Here, the completion of assigned tasks might be rewarded with reduced employee payroll contributions. Because the employer is rewarding desired behavior, the participation in the wellness program will be greater, and claims will be more positively impacted over time. There are many effective strategies in between the two mentioned above, and while setting up a wellness program can seem daunting, a well versed insurance broker or third party wellness vendor can help you develop a strategy that will produce results. In reviewing the high level statistics uncov- ered in NJ CAR’s 2014 Health Insurance Study, it is clear that providing benefits that are both appreciated AND affordable is a challenging prospect. Reducing or “bending” health insurance premium trends is a difficult task as well, but one that could reap significant rewards. Often it takes several strategies used in concert to have a meaningful impact. The key take away for NJ CAR’s dealer members is to perform a comprehensive review of all aspects of your health insurance program, and to seriously consider the latest solutions available in the marketplace. Bruce Mazzarelli is a Vice President with Fotek Insurance Solutions, a Division of HUB International NE Ltd. He can be reached at (732) 556-0446 or at bmazzarelli@fotek.net BENDING  continued from page 17 The key is to perform a comprehensive review of all aspects of their health insurance program, and to seriously consider the latest solutions available in the marketplace.