Hartford Business Journal

HARTFORDBUSINESS.COM | August 15, 2022 13 driven by the cost of prescription drugs and increased demand for medical services; the impact of new laws mandating coverage for various conditions like diabetes treatments; and the impact of COVID-19, specif- ically increased health problems experienced by some individuals who delayed care during the pandemic. One insurer that didn't submit new rate requests for 2023 was Harvard Pilgrim Health Care, which announced in April that it was exiting the state's commercial health insurance market. The company had about 12,000 commercial members in the state. The Connecticut Insurance Depart- ment is currently reviewing the rate increase requests and will likely lower some of them, a move it has consis- tently made in recent years. Final approved rates will be announced in September. Cost drivers While health insurers often get criticized for the cost of coverage, they aren't entirely to blame for the major increases, experts agreed. Jason Gutcheon, a partner at brokerage firm Professional Busi- ness Insurers in West Hartford, said hospital groups and Big Pharma are major drivers of the cost increases. A lot of focus in Connecticut in recent years has been on the impact of hospital consolidation, which has led two systems — Yale New Haven Health and Hartford HealthCare — to control a sizable portion of the health- care marketplace, raising questions about the impact on care costs. "It's not the insur- ance companies that are profiteering; they are stuck and have little choice in the matter," said Gutcheon, who has been a broker for 24 years. "The blame should go to the hospital systems and pharma. They are monopolistic." Hogan said Connecticut must do a better job incentivizing payment reforms to address the escalating costs of health care. He's a major proponent of value-based care, and moving the healthcare system away from a fee-for-service model. What can employers do? Employers will need to be proactive to defray some of the potential price increases, experts say. Gutcheon said employers will be more prone to switch carriers during this year's open enrollment season, hunting for the best possible deals. They will also likely be more willing to offer greater plan choices "so that employees can purchase lower- or higher-cost plans depending on their personal needs," he said. One option could be joining a professional employer organization, or PEO, which essentially offers outsourced human resources, including access to a potentially more affordable health plan, said Tim Klimpl, an employee bene- fits lawyer at law firm Carmody, Torrance, Sandak & Hennessey. "PEOs have been around a little while and they offer small employers the opportunity to participate in large group health plans and to enjoy the benefit of lower premiums in a large group market," Klimpl said. PEOs do have administrative fees that need to be taken into account, Klimpl noted. Other options, experts said, include bundling coverage such as dental and medical for cost savings, and offering self-funded or level-funded plans. With self-funded plans, an employer takes on most or all of the benefit claims costs. The insurance company manages the payments, but the employer pays the claims. Self-funding has traditionally been reserved for larger employers, but small companies have increasingly adopted the model in recent years. A level-funded plan is a type of self-funded plan in which the employer contributes a monthly payment to cover costs for adminis- tration, claim payments and stop-loss insurance. In addition, Shipman & Goodwin lawyer and partner Richard Cohen said small businesses can also join the state's Munic- ipal Employee Health Insurance program. The program is run by the Comptroller's office and was set up by the state legislature in the 1990s. It waives the usual 1.75% state insurance premium tax for select plans. It's also incumbent on insurers and employers to explain the plans to their workers in detail, something many do not currently do, according to Teresa Bucello, partner and Connecticut health practice leader at HR consulting firm Mercer. Many plans, for example, have wellness benefits that offer employees premium discounts or other perks that could defray overall costs, Bucello said. "There might be a gym membership, for example, and rewards toward your deductible if you achieve [a certain number of walking] steps in a day," she said. Bucello said employers will also increasingly embrace plans that offer, or even encourage, lower cost care options like telehealth and mobile units that come to a person's home. "We will see that the delivery models will continue to evolve over the next five years," Bucello said. "There are, and will continue to be, new innovations in the way that health care is delivered and how people are accessing care. Those telehealth and mobile unit [options] are keeping people out of the hospital where today it might look like the hospital is the best place to be." Jason Gutcheon Richard Cohen Teresa Bucello NMLS #402928 You manage your business. We'll help improve your cash flow. chelseagroton.com/growthatbusiness or call 860-448-4295 Siobhan Cefarelli The Heights Marketing Director Independent Living | Assisted Living | Memory Care | Long-Term Care | Short-Term Rehabilitation Meet The Heights' new Marketing Director Siobhan Cefarelli recently joined The Heights Senior Living Community as Director of Marketing. The Heights is a division of Avery Heights, and together offer a full continuum of care. Siobhan's results-driven approach has led to repeated success in the senior care industry for brands like Athena Health Care Systems, Atria Senior Living, and Home Helpers. Her years of experience make her the perfect host for Avery Heights' new senior living talk show, Your Next Chapter – Saturday mornings at 7 a.m. on WDRC 102.9 FM. Averyheights.org

• Cover