Leveraging Collaboration, Data, and Enhanced Underwriting to Drive Down Healthcare Costs

Three Tips to Deliver Better Benefits for Less

How can credit unions continue delivering robust and competitive employee benefits when the trajectory of healthcare costs is rising at such a steep pace? Here are three tips to help get us in the right direction.

Collaboration. Data. Enhanced Underwriting.

Collaboration
When it comes to purchasing health insurance for your employees, size and scale matter. The more employees on the plan, the more predictable the outcomes will be for insurance underwriters – equating to lower costs. When multiple credit unions collaborate to purchase insurance together, the risk of high-cost claims is further spread out – equating to lower costs.

Tip #1
Work with your trusted system of credit union providers to build a collaborative healthcare model for credit unions. These solutions exist, and they have proven to save credit unions hundreds of thousands of dollars through volume-based negotiated medical insurance premiums.

Insurance captives, for example, allow credit unions to collaboratively purchase insurance more efficiently and at lower costs through their unique funding models. Transitioning to a self-insured funded health plan model is more viable through an insurance captive. Plus, captives are more flexible when it comes to carrier options and plan designs.

Data
Credit unions need better access to healthcare claims data to prove to the insurance carriers that we are a healthy population and an attractive risk for underwriters.

Tip #2
23%. Our CUSO’s latest medical claims analytics report shows that credit unions’ per-employee-per-year (PEPY) medical claims costs are 23% less than other industries we evaluated. Are we as credit unions really 23% healthier than other industries? Our data says YES.

When we compare our credit union employee claims against other industries, our employees perform 23% “better” than the average employee across other industries. Even when compared to other financial services employees, credit union employees still outperform their peers when it comes to gross PEPY medical claim costs. Let’s leverage this data to negotiate lower medical insurance premiums.

Enhanced Underwriting
Most credit unions fall under a community-rated underwriting strategy through their insurance carrier. Community-rated underwriting calculates premiums based on the average risk of an entire community of employers, rather than individual risk factors. A community-rated underwriting strategy does not provide the employer with data to understand why premiums are increasing, offering minimal assistance to help them improve their employees’ health.

Tip #3
Ask your broker to evaluate enhanced underwriting strategies that will provide your credit union with enhanced data to understand your true health care costs. Better data = more options. And more options can lead to lower costs, better plan designs, and improved health.