Everyone is looking for ways to save money these days — and insurance brokers have found one niche within the business policies they offer that might help.

By trimming extraneous services like prescriptions, maternity care and chiropractic visits based on individual workers’ needs, brokers are tailoring the larger services they offer to companies as a whole.

The catch, though, is that policies could include fewer benefits — and higher deductibles.

“Most employers are increasing the share of the costs their employees are responsible for paying,” said Chris Gorey, sales vice president for Regence BlueShield. “But, at the same time, they’re providing employees with tools and information to become more engaged in making health care decisions.”

Chris Free, who heads Rapport health-insurance benefits company, sees the same trend.

“Small businesses are looking at smarter ways of doing things, and we’re seeing businesses use more creative ways to (hone) what is a crushing expense coming down on them,” he said. “They’re understanding that they need to spend a little more time on this big-budget item to find their best opportunities.”

Traditionally, employee health insurance has been offered in a package-ready form with set benefits, the only choices being deductible amounts and add-ons like dental and optical coverage. Now, employers can offer infinite options to workers — options that not only best suit the individual but also slash costs.

“In terms of specialized services, many employers are looking to reduce the benefit level for certain discretionary services, such as vasectomies or varicose vein removal,” Gorey said. “Or, while these services might still be covered, employees are responsible for a greater share of the cost.”

He said Regence is seeing more prescription drug plans with significant co-pays or front-end deductibles for brand-name drugs.

“While employers want their employees to have access to the medications they need, where available, they are driving toward generic utilization as much as possible,” he said.

High deductible plans combined with health savings accounts have been another increasingly popular way to simultaneously offer coverage while encouraging financial accountability. With this mix, employees pay more up-front for services but they also save designated amounts to pay for services that aren’t covered.

“This enables each employee to construct a more appropriate, personalized benefit package,” Gorey said. “It also helps employers reduce expense liability, while also creating a more engaged work force that will ultimately be more attentive to health care costs.”

Healthy behaviors also are a key area that businesses are endorsing — and even punishing for lack of — in conjunction with their insurance companies.

One example is lower prescription medication co-pays or deductibles for employees who actively participate in chronic disease management.

“By driving healthy behaviors and cutting unnecessary or complicated expensive services, employers can make sure their workers are properly utilizing their health care,” Free said.

However, even with all these means of savings, employee health insurance is still an expense some businesses just can’t afford.

Gore said Regence BlueShield takes aggressive measures not to let that happen.

“We will work closely with employers to provide creative options, including reducing benefits and supplementing their benefits package with voluntary offerings,” he said.

Free, said his agents also work with company budgets and available benefits packages to meet a business’ overall needs. “We use our resources and expertise all the way down to the individual person,” he said.

Changing landscape
Health insurance, Free said, is becoming more family friendly, both in the relationship between employers and workers, and in their relationships with insurance companies.

“We reach out to the families,” he said. “And even if the dad is the policy-holder, our office is always open to the moms, who are many times the ones doing the research on the family insurance.”

And more changes lay ahead.

Both Free and Gore said there will be a greater market for individual policies.

“The requirement to provide health insurance only applies to employers with more than 50 employees and most of these employers offer benefits today,” Gore said. “What will be most interesting will be to monitor the behavior of employers who determine that paying the relatively small penalty and directing their employees to purchase insurance on their own through the individual markets will be more cost-effective and deliver a better business result.”

And the roles of primary care will continue to evolve.

“The world of primary care has changed a lot and it’s the primary piece that keeps people healthy, taking care of the stuff you see every single year,” Free said. “We need to recognize that primary care is extremely important in keeping health care costs down. It’s good primary that keeps us out of the catastrophic insurance area.”

Industry has major economic impact

According to the American Insurance Association, insurance makes a major contribution to the Washington economy.
In 2007, insurance companies were responsible for $5.2 billion — or 2 percent — of the state’s gross domestic product total and they were the second-highest business contributor to the state General Fund.

In the same year, according to the U.S. Bureau of Labor Statistics, the industry pumped $3.2 billion into local and state economies and accounted for 50,727 workers.

“Insurance makes it possible to buy a car or a home, start a small business and build communities,” said Karl Newman, president of the Northwest Insurance Council. “(It) also provides quality employment opportunities to thousands of Washingtonians … Insurers help fuel Washington’s economy.”

Writer Holly Smith Peterson can be reached at hpeterson@BusinessExaminer.com.