March 24, 2014
As with all companies small and large, the Connecticut Energy Marketers Association has seen steady annual increases in its health insurance costs for employees over the years. As with most companies, CEMA had been on a defined benefits plan where the company chose one policy for all employees and everyone lived with that choice. As with all companies, facing an annual renewal came with some trepidation as they were unsure about how costs, plans, deductibles and co-pays would change. Sound familiar?
In 2013, all that began to change as the association opened its own private health insurance and employee benefits marketplace. While opened for the use of its members as a key affinity program, the association uses its own marketplace for its employee benefits needs as well.
The process of taking control over company benefits costs – as well as empowering its employees to make benefits choices for the first time – began with careful planning. The association had to establish a sensible budget for its benefits costs. This provides certainty for the association regarding what it will spend on employee benefits. Then, the association determined how to divide up that budget between single employees, employees with families and so on. CEMA was defining its contributions for benefits instead of defining the benefits to be used by its employees. Armed with the certainty of a budget and dividing it up, we moved on to how to use the CEMA Private Benefits Marketplace.
CEMA’s marketplace came with all of the health insurance carriers available in Connecticut and all of their available plans for health insurance, as well as a full suite of ancillary and voluntary benefits that could be selected. CEMA chose the benefits, carriers and plans to make available to its employees – then began the process of educating its employees about the new world of becoming an educated benefits consumer – as with employees nationally, something at least 70% of employees had never been aware of before.
CEMA’s employees, for the first time, not only became educated about their own benefits but they also were empowered to make their own choices with the help of a professional benefits adviser. No more one size fits all – each employee chooses what that employee believes is best for themselves or their families. Unlike the problems in the federal experiment where most people make their decisions alone, with this association marketplace the employer and employee always have professional insurance guidance.
In proceeding to the marketplace, each employee could see how much money had been credited to their CEMA Private Benefits Marketplace account. Then each employee used the marketplace to compare plans, weigh what they wanted to choose for plans and benefits, and ask the benefits adviser for the needed help to ensure plans had the right coverage and networks important to each person. Employees, for the first time, had the chance to buy additional plans for accidents, cancer, vision and more. The employees selected their plans, enrolled electronically through the marketplace, and then could return to the marketplace whenever they needed to to make life changes or other changes they desired – as the CEMA Private Benefits Marketplace has professional support 24 hours a day, 7 days a week, 365 days a year.
If the employee’s benefits choices exceeded the amount on account from CEMA, the rest is paid for by the employee by payroll deduction automatically – and then remitted monthly by CEMA. Each employee took less than 20 minutes to complete their enrollment.
Connecticut has the 4th highest health insurance costs in the nation. CEMA has managed to fix its budget for health insurance with certainty – then empower its employees to make educated decisions about selecting the benefits they want. Bringing real competition for benefits offered to employees, creating certainty over costs for the employer and expanding employee choices and creating educated consumers. That’s what using the private association benefits marketplace is all about.
The cost for health insurance for the average family in Connecticut is about $50 a day – for an individual about $25 a day. The cost for a person to use the CEMA marketplace to get control of these costs? 39c a day.
Now, every member of CEMA is beginning to see what is possible from changing the way they have offered benefits over the decades, as well as the power the new CEMA marketplace puts in their hands and that of their employees. The private sector solution to the challenges of benefits management.