Pub. 16 2017-2018 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 8 18 new jersey auto retailer When an Old Idea Becomes the Latest Strategy BY BRUCE MAZZARELLI “The more things change, the more they stay the same” is a famous quote we’ve all heard. Interestingly, it is a quote that could be used to describe health insurance over the last few years. Let’s take a look back and compare some long considered extinct strategies to the “new” strategies of today. The idea of paying a deductible before getting coverage under one’s health insurance plan has been around for more than half a century, yet today, this old concept is presented as “new” in the realm of High Deductible Health Plans (HDHP’s). HMO’s, with limited networks, were the go-to, cost-effective solution in the late 1980’s. Fast forward to today, and the idea of a smaller, narrow network is back with carrier strategies such as Horizon’s Omnia platform. Before New Jersey Small Employer Health reforms came about in the early 1990’s, there were over 30 carriers selling in the State - many offering self-insurance. While self-insurance was absent from the small employer marketplace for decades, it is back today with several carriers offering programs to businesses with as little as five employees. My task here is to highlight current health insurance strategies that have proven to be effective, and to provide a glimpse into the fu- ture. In doing so, the reader may get a sense that the past’s failures are being resurrected, only to become extinct again. If we consider the strategy of the HDHP, that may soon be the case. Many feel that those employers who have not yet embraced HDHP’s, never will. And those that did, will get to the lowest available benefit level and have nowhere further to go at renewal. Fortunately, some of today’s strategies hold greater promise. I will address three approaches worth considering today– Narrow Networks, Level Funded ASO (self-insurance), and Eligibility Au- dits. The idea of a smaller, narrow network, is not a new concept. However, what is new is the stacking of two networks under a single benefit design. Today’s narrow network strategy is predicated on a more cost-effective, sub network. Horizon’s Omnia platform has set the bar, with Aetna, Amerihealth, Cigna, Oxford and United all offering or developing competing platforms. Under a narrow network plan design, an employee would have less cost sharing when using the smaller network of providers. By auditing which spouses have availability of coverage, an employer can save money by eliminating that spouse’s coverage, or implementing a spousal surcharge to defray costs.