Business Owners! Thinking about a Wellness Program at Work?
We discuss 3 Ways Business Owners Can Save on Healthcare Costs.
Hint! Implementing a Health & Wellness Program at Work is probably the smartest in the long term.
We had the chance to sit down with Steve Misewich of T. Jacob Health & Wellness. Steve has a pretty awesome story that we will get into in a little bit.
After that, we advise you to pay attention!
Steve has a wealth of knowledge when it comes to the healthcare space. And he is going to give all of us readers some helpful advice on how to save on health care costs.
In addition we are going to dive into the importance of small & medium size business owners having a Wellness Program at Work to save on costs for the long term.
The Story Behind T. Jacob Health & Wellness
I just started a new venture called T. Jacob Health & Wellness. I’ve got a pretty diverse background. Prior to this, I sold copiers for years and medical devices to hospitals and then surgery centers from there.
I went into sales for human resources technology and payroll. But then with my last job I had a transformation. As a result that put me to where I am today.
The last position I had I was a producer for a health and benefits brokerage firm.
The reason I’m going into health and wellness now is because of that and because of my transformation.
In my 30s, I was sitting on the couch. I was eating unhealthy and I made a decision back in 2012/2013.
But I also knew that if I kept going down this path, I’m going to end up like a lot of people in my family. They have a history of chronic disease and things of that nature. So I got healthy.
I dropped about 70 pounds and I’ve kept it off over the years and I want to teach other to do the same.
There’s a lot out there on the internet related to nutrition and health. You’ll see experts talking about completely different things.
Well, I want to simplify that and help people get healthier. In turn that will help employers lower their health care spending. A lot of that is predicated on having a wellness program at work.
So that’s kind of a background and why I’ve started this Venture.
Before T Jacob Health 7 Wellness, I sold health care benefits to corporations that were anywhere from a hundred to a couple thousand employees.
What I found every time that I talk to any small, medium or even larger business is year in and year out. Everyone is dealing with their healthcare spend.
They are trying to curtail the rising costs. The only options for people out there right now when you get an increase in your renewal is
- You’re either going to just suck it up and pay more. or
- You’re going to lower the benefits that you’re giving your employees.
Okay, so we’re going to talk about three ways a small to medium sized business can lower their healthcare spend. There are some routes but I think what you will read is implementing a Wellness program at work is probably the most beneficial, long term.
I thought about this topic and I want to do something a little. different.
Most business owners are either shopping around their carrier at the end of the year and trying to get their broker to get them a lower rate.
So most people knows that. They might be looking at different options such as HMO, PPO, HRA. So I didn’t want to talk about that.
Three things employers can do to lower their health care spend are:
If you’re fully insured, going from a fully insured plan to a partially self-funded plan or a level funded plan.
If you can’t do partially self-funded maybe joining a consortium
And finally implementing a robust Health and Wellness Program at Work
Option 1: Changing from a fully insured plan to a self-funded or level funded plan
To explain a little bit about self-funding. if you’re company is fully insured. And your broker is not bringing up partially self-funded. You have to bring it up to them. Or maybe look at another broker.
Because with a fully insured plan, it’s the most convenient for all parties. You pay your premium on a yearly or monthly basis.
However, unfortunately what happens at the end of the year, you’ll have the carrier comes back to you and says. Okay you’ve had several high claims from from your employees.
And now you’re getting an increase of 30%, for example.
Well, there’s nothing you can really do. Okay? You don’t have much insight into those claims it because it’s the carrier who’s paying them month in and month out
So your options at that point are:
- Fight with them to get a lower rate and maybe it comes down.
- You just bite the bullet and you lower your benefits plan that you’re giving your employees.
- Or you shop it around to another carrier which nobody likes because then you got to change your cards and all of that administrative stuff. Somebody might lose their doctor as we..
The cost breakdown of a fully funded plan
In a fully funded plan:
- 20% of your rate is fixed cost. We won’t go into the details of that.
- About 50-60% of your rate is going to be your anticipated claims that the carrier believes your employees are going to have that year. They’re usually pretty pretty good with that
- And then the remaining 20 to 25% is margin or profit the carriers put on there.
So if you go from a fully insured plan to a partially self-funded plan you’re no longer going to have to pay for that margin
But but it gets even better than that.
Let’s say you have a good year and you don’t have many claims in a fully insured plan. That carrier is getting that margin that that they put in there (20-25%).
But they’re also not giving you back any of that money that you paid for claims you didn’t have.
In a partially self-funded plan you’re only paying for the claims that you make.
If you have a good year you’re saving a lot of money. But even if you have a bad year what happens is there’s their stop-loss insurance. So as bad as it can get with claims, you’re only going to pay up to a certain amount.
So that’s step 1. I would definitely look at changing away from a fully funded plan. If your broker is not talking about it. It’s either their attitude or their aptitude.
What I mean by attitude, if you have an increase in a fully insured plan, say 20%, the brokers is getting a raise the next year. This is like like the only industry out there where you’re giving yourself a raise for doing a bad job.
Or its aptitude. What I mean is it’s more difficult to put a partially funded plan together for a broker. So maybe they don’t understand it and they’re not talking about it. So I would shop around. i would look at another broker.
Option 2: Join a Consortium to lower your healthcare costs.
So how would that work?
Let’s say you’re a private school or a manufacturer with 35 – 40 employees and you want to have a pretty good health and benefits plan. It’s important in attracting and keeping talent these days.
At these levels, it’s kind of like “the rates are the rates.” You could have the healthiest employees out there. You’re going to get what the rates are regardless.
If you look into a consortium of like companies or organizations. So using a private school as an examples, you may find a consortium that has ten other private schools. You would pull all your employees together.
Now, you’ve got 500 employees.
You would get economies of scale and you can put together a much better health and benefits plan that’s going to cost less than it would if you’re doing it on your own.
So finally number three. This is pretty interesting topic out there.
Option 3: Implementing a Robust Health & Wellness Program at Work.
Rob: But before we dive into it out of the three options where do you think companies should focus?
Well first off, maybe you can’t become self funded. It might work for some some companies and not others. The Consortium again might not work for everybody.
But the one thing every everybody can do and I don’t care if you’re a small, medium or large company. They all can put together a robust Health and Wellness Plan at Work.
I think is the most important.
Let’s step back and say you’re able to go self-funding and you’re able to lower your cost from that fully insured plan we talked about well, now your self funded and you could you could tweak your plan and do things in a much better way.
But you’re still probably going to get some increases, there’s no way around it.
If your employees are still having the same health issues that they were before nothing will really change over the long term without a Health & Wellness program at work.
With a Health and Wellness Program at Work, you are actually getting your employees healthier. Over the long term your healthcare cost are going to go down.
So I believe is the one way you really can truly change things.
Earlier when we were talking about the cost structure of plans, 40-60% of the cost is just like claims.
If you have a plan a robust Health and Wellness Plan implemented at work, over time those claims are going to decrease.
In addition employees are going to be happier and healthier.
Absenteeism will be down due to less doctor visits.
And productivity will increase as a result.
I’ll give you a prime example. When I was 70 pounds heavier than I am today and on high blood pressure medication.
I used to get heartburn all the time.
At the time, I wasn’t even anticipating this but with losing the weight and getting healthier when it came to eating & exercising, I’m no longer on any medications of any kind.
I no longer get heartburn. Things are just much better and I feel better. I’m not getting and pulling a muscle just because I grabbed the remote.
Things are much better and that’s what I want to do for employees within organizations. If they get healthier, then it’s going to cost that employer less.
So it makes a lot of sense as an employer to put a robust wellness program at work together.
A lot of people think about health and fitness as the hour or so spent at the gym.
But it’s more! it’s more encompassing you make tons of nutrition-related decisions not even in the gym!
And we spend most of our time at work where we’re making nutrition decision.
So it’s very important to you know, Me talking about that all the time other than just one hour outside of the day. But you know, I guess outside of that like, you know outside of just I guess you could say chronic disease and a healthier, you know employee work base, which is very important. Like what are some other benefits that.
To piggyback off of that, a lot of people think of it’s just about going to the gym for an hour.
I think nutrition is a bigger part!
The nutrition aspect is more important.
To give you a prime example. The first month when I got back in the gym, I lost five pounds, but I didn’t change my nutrition.
The next month. I started eating healthier and lost 20 pounds!
It was all about nutrition.
Getting stronger is great and you want to do that within the gym environment.
But nutrition is really where you’re going to really see results.
It’s the old adage, “you are what you eat.”
Some employers may think of wellness programs at work as, “let’s do a weight loss challenge” or or give out fitbits. That’s a good start.
But then people are going to go back to their old ways without a formal nutrition plan and wellness program at work
Employers need to give their employees long term support.
You’re always going to have that that 1/3 that are already healthy and they’re going to jump right on board and do it.
You’ll have another 1/3 of people that used to be healthy and maybe this is the kickstart for them.
But the bottom 1/3 are the ones that have been sedentary for years.
Change will be hard at first. You’ve got to consistently give them support whether that’s by phone or in person talk to companies.
You can do that with monthly/quarterly nutrition meetings and educational seminars.
So it’s all encompassing and it’s about educating and changing a culture.
In the end a great wellness program at work is just gonna make everybody healthier and happier.
They’re going to be more productive as well.
But it all starts with nutrition as the focus. And most employers are not set up to provide such coaching.
Rob: Alright awesome! man. So a lot of great information there. A ton of actionable items for small to medium business owners on lowering their health care costs.
Steve is an expert on the ins and the outs of the industry. But Steve, how do people get a hold of you?
You can find us on the web at TJacobhealthandwellness.com.
or email me at [email protected]
If you want to learn more about where I think you can reduce some healthcare spend. I still know the industry. I know people in the industry.
As far as health and wellness programs at work is concerned I’d love to discuss that with you as well.