The Post-Subsidy Healthcare Era: How Small Businesses Can Survive Rising Premiums

Hi, everyone, and welcome to the special simulcast of the Neil Haley Show and the Cutting Edge Benefits Podcast with our host, Tom Quigley of Claim Links. Tom, what's going on? How are you? Hey, hanging out in Maine.

Got back from Cincinnati. So you are now in Maine. And our topic today is navigating post-subsidy era, healthcare cost strategies for small businesses. Basically, this is important to look at because of, again, the subsidies and all these different things.

So my question for you, Tom, is with the expiration of major federal health insurance subsidies this year, many small business owners are facing massive spike in premiums. Tom, what are you seeing at ClaimLinks? How severe is this subsidy cliff? And what is the immediate financial impact for mid-market employers?

for smaller companies it's more drastic because you have people who are paying zero premium who are now paying 2 000 a month premiums so because they don't qualify for the enhanced subsidies now keep in mind the enhanced subsidies i had families making a quarter million bucks qualifying for subsidies. Now a family of five, it's 130, 140. So that's the biggest challenge. Some of the smaller groups are better off, depends on the states, using a level funded group plan for the people who are healthy and the unhealthies setting up a medical expense plan for everyone to prevent discrimination.

So you're getting good rates on 80, 90% of the people. Okay. So leveraging MIRPs as a strategic alternative. So basically to counter these rising costs, ClaimLynx frequently uses self-funded medical expense reimbursement plans or MIRPs.

For a business owner who might not be unfamiliar with the mechanics. How does a MERP structurally lower costs while still maintaining strong benefit coverage for the staff? Well, the MERP itself is just a tax law that allows employers to do things differently and be in compliance with non-discrimination issues. So the first step is it allows you to buy the insurance differently.

It allows you to have people on spouses plans or military or individual or group health plans with high high deductibles and underneath your controlling the benefits the co-pays the doctor co-pays the specialist co the ERs and you controlling the costs on those by doing it yourself and the MERP allows you as a business owner to pay for that using tax dollars So the employees receive it tax-free just like they would when you're buying it from the insurance carriers. So you're keeping the catastrophic coverage from the insurance carriers and you're keeping the networks and their discounts and the preventatives built into all plants.

And there's no preexisting and there's no limit. So you're not providing, you're providing them the same basic foundation. It's just how you build your house, you control now. Whereas before you had no control.

So thinking about a MERP, Tom, and so many ways, if they were trying to do it without the help of claim links, how challenging would it be? It would be difficult. You need a document. So you'd have to pay an attorney thousands of dollars to get a document versus ours, I believe, is 500 bucks.

That keeps you compliant. That's the first step. The second step then is how are you going to manage it without violating HIPAA? you know there's all kinds of legalities and questions and then how are you going to pay the claims are you going to go on the honor system the just write a check to the employee and let them pay it or are you going to pay the doctors directly and again how are you going to do without violating the HIPAA laws laws or you don't even have to violate the HIPAA laws if you let somebody go and they can say that because of their health conditions the reason you let them go you're paying thousands of dollars to fight that where you can eliminate all that by having somebody who's done it for 25 years do it obviously there's some companies that manage them but a lot of times they're paying the employees directly uh the employees have to send in a you know explanation of benefits and do a lot of extra work right and that and you're not they're not creative because they're not showing you the most inexpensive way to finance the health insurance and see that makes so much sense tom because you're looking at it and saying oh okay um basically dyi anything is always a good idea having an expert in doing it you know what i mean yeah and then you gonna have so many hassles and get yourself out if having hr handle it or somebody else you gonna have so many headaches explain the headaches of trying to do it compared to how you have a well fine file fine oiled machine with claim links the people you have in your staff to be able to handle all this stuff and my income the majority of it's coming from what you save from where you were.

Right. So I'm working on savings. I don't quite get, you know, every, you know, every dollar I save you, I make 20 cents. So if you want to go out and do it that way, I'll come in and you will use the rates that you were paying, doing it patchwork.

And then I'll come in and save you thousands more. a lot of these agents are trying to sell these gap plans and they make zero sense compared to a merp it's like if you're going to use a gap plan design the benefit plan where you're buying the lowest cost option and all you're doing with the gap plan is buying it to take away risk for inpatient and outpatient surgeries uh but when you get your claims data that's for the employers that are afraid but when you start getting your claims data realize that you're giving the gap carrier thousands of dollars extra that you don't have to you can drop it but you know as a band-aid here but most most agents are trying to put the gap in because it pays high commissions money it's all about money with these guys yeah but anybody with a gap plan i'll come in and save you thousands and do it the gap lines you don't get your claims data like the insurance carriers these small groups so they have no idea because the hipaa laws you can't ask but you know a dependent has a month in the hospital how do you know as an employer you don't that's right so that's the employee tells you Mm-hmm.

And see, that's the challenge, the DYI. That wouldn't be a good idea. So employee and retention is a major focus right now. And shifting healthcare strategies can sometimes cause anxiety among staff.

How do you advise companies to transition to self-funded or MERP framework without causing friction or making employees feel like their benefits are being downgraded? you have to get the team on board so as an owner you've got to make sure your hr and your office manager or your cfo and everyone is on board of we trying to and the employees we trying to improve your benefits and cut your costs You know, I always say to people on renewals here, can't go, this is what you were paying.

This is what your cost was. Okay. We were going up 20 more percent at renewal here. so we were going to have to have you pay this and give you less so by doing this we get to have you pay less and give you more does anyone have an objection to it so you got to talk to the employees like that you got to explain why we're doing it but the problem is is a lot of the hr directors get all emotional on this stuff and they continue down a path that makes zero sense or they put in like a gap plan or something crazy.

And you're just sitting there going, why are you doing this? Exactly. Why are you doing so? And that's the problem.

And that's why you're here to solve that problem. And I think at ClaimLinks, when you and Christy started the company, you said to yourselves, we're not just doing this to help save the employer money. We're doing this to provide better benefits for the employees, aren't you? yeah that's the whole premise and helping people for example last night i was eating dinner on our way back up to maine from boston at a restaurant outside of portsmouth new hampshire called newix if you've never been to newix you need to go if you great seafood and it's right on this bay water lake whatever you want to call it that's tide affected and you're sitting there going oh This is just gorgeous.

And the table next to us were some older folks talking about all these people in hospitals and have all these diseases. So when they were leaving, I go, I'm going to do you guys a favor. I'm going to give you a website. It's called needymeds.

org. And literally everything you're talking about, there's grants that will help your friends out. And they were like, the guys looking it up, go, oh my God, how do you know this? And I'm like, I go, I've been in the, I've been, I have a solution on health insurance.

We've been doing for 25 years now. And it's an impressive solution to say the least. So go to claim links.com.

You can schedule a call at Tom and his team today. Tom's definitely here to help. Appreciate it, Tom. Thanks.

I have a special samulcast Neil Haley show and the cutting edge benefits podcast guys. Take care.