What Happens When Self-Funding Goes Well?

Engaged, health-conscious community contributes to success

How the Ashland School District Saved $9.8 Million


What Happens When Self-Funding Goes Well?

 

We work with many different types of employers, and we are especially proud of the work we have done with the Ashland School District in Oregon. Since working with us in 2010, they have saved more than $9.8 Million in health insurance premiums without reducing benefits or raising deductibles for their 400+ employees. In this day and age where most employers are experiencing substantial rate increases, this story of success is unprecedented. The funds saved have been reallocated within the school district to improve the student-to-teacher ratio, enhance employee salaries, and deploy new programs.

The Ashland community is well known for its arts, culture and progressive thinking, and this seems to go hand-in-hand with with their attitude for healthy living. This made our job of designing and implementing a customized health program easy. What made this program so successful is the leadership within the school district and the willingness of the employee health team to engage in developing – and ultimately running with – the program we designed. The staff fully embraced the learning environment we created, and we are thrilled and honored to continue to offer this service to help the Ashland School District save funds that can be used elsewhere.

For more details on this story, check out the press release on our website.

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From the start of 2010 to the start of 2015, the health insurance rates for ASD actually decreased by 1.4%, compared to a 72.2% increase for the Oregon Educators Benefits Board (OEBB), The Oregon School District Insurance Pool is sponsored by the OEBB.


“I am thoroughly impressed with the work that has been done by Sophus Health, along with my predecessor, Juli DiChiro, our teachers and staff,” said Jay Hummel, superintendent of the Ashland School District. “When I stepped into office in July of 2013, this program was the hidden gem. As a result of the savings, we have reallocated nearly $9.8 million to improve the student-to-teacher ratio, enhance employee salaries, and deploy new programs. At a time when most school districts are experiencing drastic rate increases in health insurance premiums, resulting in higher local taxes or cuts in critical programs, the Ashland School District has been able to remain focused on student achievement and improving the work environment for our employees. I hope every school district in the country takes notice of what we have accomplished here.”


“The experts at Sophus Health were vital in guiding us to take ownership of our health plan, making the most of every benefit dollar, and leading our employees to live healthy lifestyles,” said Becky DeSalvo, teacher and health committee member, Ashland School District. “They bring a breadth of knowledge in insurance and healthy living typically available to only the largest companies.  They eliminated the perceived barriers in offering precisely what we want for our employees, and their ability to produce clear reports on plan performance, explain new complex topics, and present current industry trends has enabled us to become a more savvy, empowered and caring group.”


Employers that Dare to Care, Create Health and Wealth

Employers that dare to truly care

Health and wellness are intrinsic states of being, coming from a place within ourselves where we organically have a sense of calm, contentment and clarity. This arises when we have – or are working toward – a knowing and feeling of purpose and meaning as the driving force of vitality in our lives. Yet in today’s fast-paced world of information overload where time and money are in ever-shrinking supply, friends and family get placed on the back burner, rest and relaxation are luxuries and completing the never-ending to-do list is a mere pipe dream, living with purpose can be a challenge. When we feel disconnected from our life’s purpose, stress and disease are more likely to occur. Thus wellness is integral to how we live and work.

Being with a sense of purpose and meaning can be enhanced when one has a group surrounding us that offers care and support for one’s continued success. This group can exist at home, in places of worship, among friends and in the workplace. Given that most people spend their days at work where they receive and negotiate health benefits, the workplace represents extraordinary possibilities for setting a tone of well-being.

Employers that dare to truly care about their employees’ well-being can create environments for happier and healthier employees; this translates into increased productivity, cost savings and general satisfaction. With the advent of the Affordable Care Act (ACA), employers now have incentives to offer employee wellness programs as part of the health benefits package, but the rules and regulations for tracking costs and being in compliance can be confusing, and keeping up can be a burden for HR people. The response from many organizations has been to ask their broker or insurance company to provide solutions for wellness in the workplace. While we applaud the efforts to create a more healthy workforce, we are dismayed by the obvious disconnects and inefficiencies of many of these programs purchased by well-intentioned employers.

The problem with this scenario is that insurance is a financial tool that happens to be applied to health; the expertise lies in finance, not health. Most brokers offer products for a fee and most insurers are interested in lowering claims by looking only at the system in place – where dollars are coming in and going out. The response within the traditional insurance industry has been to create “plug and play” products, with financial rewards and punishment as the basis for using the products. This perpetuates the mis-understanding of wellness and often alienates those employees who need the most help. True success in wellness is not about creating an environment of fear, shame or better than… It is a shared experience that comes about when people feel a sense of belonging and caring wherever they are in each moment. In this context, leadership has an opportunity, arguably a responsibility, to offer a community of deep care that extends beyond the roles of bosses and workerbees with wellness players and losers. Employees are people with hearts and feelings and families, not consumers or commodities.

sophus-family-people

 

 

“True success in wellness is not about creating an environment of fear, shame or better than… It is a shared experience that comes about when people feel a sense of belonging and caring wherever they are in each moment. “

 

Creating wellness programs that enhance success will arise through intuitive, enlightened and caring leadership, and these subtle, yet tangible shifts in the culture of the workplace serve as a catalyst for real well-being. In creating wellness programs that meet your organizations unique needs, we invite you to consider the following:

  • Does your work environment set the tone for well-being in a caring way, or do you need to make a cultural shift to support this?
  • Are you working with caring experts that understand health and wellness, as well as the numbers and financial tools?
  • Do you own your program such that you know where every dollar goes and can make changes any time to address specific needs and keep costs low, or do you rely on a broker to tell you what’s best?
  • Does your wellness program tie directly to claims data, so you can measure results and lower costs?
  • Does your wellness program address all aspects of life that may cause stress and affect health, or is it limited to physical activity?

happy-work-environment

Very few people awake each morning wanting to feel bad, and when disease arises employees become more aware than ever of their need for support. Organizations that are finding success know this intuitively and have employees within an environment of care. When folks feel respected and heard, asked instead of told and invited into an evolving place of well-being, the tone shifts to one of involved healing. In this place costs may go down while engagement naturally rises. People are not commodities or consumers of health care dollars; people are complex living beings with feelings, hearts and minds. Employers can chose to consciously build a foundation of well-being that supports all aspects of life, or they can chose to ignore certain aspects that may contribute to imbalance in this foundation. Employers who embrace this concept and who dare to care are taking the first steps toward wellness success for all.


The Financial Aspect of Health

Our finances can impact our health.

financial well-being

 

Typically when we think of our health, our finances – are not the first thing that comes to mind. However, we believe one’s financial health is connected to a person’s whole well-being.

Sophus Health creates its employee health programs around education in the 5 Aspects of Health – Physical, Financial, Spiritual, Relational and Self Health. Today we are going to look more closely at the aspect of Financial Health and its impact on our well-being.

We come into our adult relationship to money with ideas collected from the people with whom we grew up, our early experiences and the media’s interpretation of what money will do for us. Early successes or challenges with managing our finances also shape our idea of the meaning of money in our lives.  When our Financial Health is good we are apt to feel good about our self (another aspect of health) and likely, when our Financial Health is poor, a person is more likely to feel poorly about their self, which can lead to poor relational and/or physical health. The 5 Aspects of Health are all connected to and related to each other.

We can change our conditioning and create a future that does not mirror our past. When we understand the more complex role of money in our lives, then we can begin to exert control over it. When we help people understand what they truly want – they are then empowered to use money as a tool for bringing about and maintaining financial health. Education is a key element of empowerment.

Sophus Health has methods and resources available to address Financial Health as part of employers’ overall healthcare programs, because employee health is reflective of the health of the company, and your success is reflective of ours.  Let’s talk about this and prepare to prosper.

 

my first piggy bank


The Physical Aspect of Health

Physical Health is more than the absence of illness.




The physical body alone is just one part of the integral whole of complete well-being. Our physical bodies are a part of a community of the self – a dynamic convergence of body, mind, spirit and environment. There are changing worldviews on how to treat the body for physical ailments. The Eastern approach to health has viewed the body as completely entwined with the mind and the spirit – while Western medicine separates spirit from matter. Today, many thought leaders in medicine are combine the two views, taking pieces from each to create optimal physical health for individuals. When it comes to health, there are unexplained phenomena in what the body is capable of healing. Time and time again we see that when people have something or someone to care for – even if it is a pet or a plant – this ‘responsibility’ to the other can improve a person’s physical health. Physical Health can improve simply though the act of rising outside of one’s pain to experience a world and a community that benefits from their engagement in it. Although physical health is a vitally important aspect, “whole person health” is not just the absence of physical pain or conditions. Furthermore, physical conditions are frequently exasperated or even manifested by stress or imbalances within other aspects of life. This is why we created a health model that supports people in the 5 Aspects of Health that also includes Financial, Spiritual, Relational and Self Health.



Partially Self-Funded Insurance Simplified

Own your health plan.


 

What does Partially Self-Funded Health Insurance mean?

When an employer chooses a self-funded group health insurance plan (aka a ‘self-insured’ plan or partially self-funded health insurance) the employer assumes part of the financial risk for providing health care benefits to its employees, while stop-loss insurance covers the remaining financial risk beyond the employer’s tolerance level. In simplistic terms, self-funded employers pay for each out of pocket claim as they are incurred instead of paying a fixed premium to an insurance provider. What most people are used to is the fully-insured platform where a set monthly premium is paid regardless of usage. Typically, a self-funded employer has a special trust account set aside money to pay incurred claims. Funds to this account come from both the company and employee contributions.

 


What are the attractive features of a Self-Funded Health Plan?

  • Flexibility: The employer can customize their health plan to meet the specific healthcare needs of its employees, as opposed to purchasing an insurance policy that is generically designed.
  • Freedom: The employer is free to contract with any provider and/or network that is best suited to meet the healthcare needs of its employees.
  • Control: More dollars in the bank instead of in the insurance companies’ pockets. The employer manages its health plan reserves account – allowing them to earn interest income – dollars that would be otherwise be used by an insurance carrier through the company’s paid premium dollars.
  • Improved cash flow: Since the employer no longer pre-pays for its health coverage, that money is generally available for company use.
  •  Federal Rights: Self-funded health plans are regulated under federal law (ERISA) which overrides state-mandated health benefits requirements.

 

 

 

 

 

 


partially funded health insurance

This is a basic chart of costs associated with a partially self-funded health insurance plan vs. costs typically associated with a traditional, fully-funded plan.

 


save money with sophus health insurance plansSophus health insurance plans can keep money in your bank account

Other attractive features to a partially self-funded insurance plan:

 

  • More savings! The employer is exempt from state health insurance premium taxes, which can be around 2-3 % of the premium’s dollar value.
  • No Risk Pool:  No longer in a health insurance risk pool which adds a specific fee to monthly premiums based on occupational risks instead of the actual peoples’ risks in your company.
  • No overhead: No longer paying the insurance carrier’s overhead costs with your hard earned dollars.

For many healthy companies, healthcare premiums far exceed the actual usage or claims made by its workforce annually. Do you think the insurance companies return the unused portion to employers at the end of the year? Ah, no. That all goes into their annual profit. With a self-funded plan that potential profit to the carrier is in the employer’s own health reserves account accruing interests.

There is a little more to a partially self-funded insurance plan and methods to safeguard a company against large claims that we will discuss in more detail in future posts.

If you would like to see if a partially self-funded insurance plan is right for your company – contact us today and let us help you decide.


Why are healthcare costs SO HIGH?

Why is U.S. healthcare so costly?


If you’ve just landed here it is because you too are wondering WHY healthcare costs in the U.S. are so expensive and keep rising. You are here because you want to know exactly what factors are driving these costs. We think John from vlogbrothers on youtube does a nice job explaining why health care costs are so high while using light humor in this video.

 

Our goal as a company is to use as many resources as we have up our sleeves to save companies and members money on health care costs from as many angles as possible. If your company has not yet considered partially self-funding your health benefits, perhaps now is the time.  Read more about self-funded health insurance here!