This month we had the opportunity to speak with benefits broker Dave Lewis. Dave is a Director at NFP, the fifth-largest consulting firm for employee benefits in the United States. He also has a unique perspective on the insurance industry after spending 30 years in the Ohio Public School System, as a teacher, as a Principal, and as a Superintendent.
We asked Dave about his insights on a continually evolving employee benefits industry after a career in school administration. Here’s what he had to say.
After a long career in school administration what skills have you been able to carry over to the employee benefits industry?
When I meet with a school client at NFP, there's instant trust there because I used to be a school superintendent so I know what they're going through. The public sector is a whole different world. It really helps that I speak their language and I understand collective bargaining, which is very valuable to them. I often go out and talk to their unions and explain things because I can explain benefits in ‘school language’, but also I understand the insurance side. My last district, we had about 400 employees so I'm used to managing a large pool of employees and being able to communicate with them.
In your experience, what do you find is the most common misconception about insurance or benefit options?
I think there's a misconception out there that all consultants or all brokers are the same and they're really not. I think there's a lot of different niche markets out there. Some consulting firms are better for larger groups, while some are better in smaller groups, some specialize in the public sector or private sector. It can be frustrating because sometimes a group is not getting what they need from their consultant, but there is hesitancy to change because they think it'll just be the same thing over and over again.
So, how should somebody find the best fit for them?
We recommend our existing NFP benefits clients go out to RFP every few years to make sure that they're getting what they want. My boss always says he wants to make sure we're still “the prettiest girl in the room” and sometimes the client says “no, we're not going to do that, we're completely satisfied with you,” but other times they feel an obligation. If they are a public entity and dealing with taxpayer money they feel an obligation to go out to bid every few years, and that’s fine. Either way, it gives us an opportunity to get feedback and make sure that we're not falling asleep at the switch.
With all the changes in healthcare, how should employers best prepare themselves?
Well, they need to make sure they have a long-term strategy, and that they have the flexibility to make plan design changes. If they are in a collective bargaining arena, they may only be bargaining every three years so they have to make sure that in year two of the contract and year three of the contract, changes are being worked in. With inflationary costs over three years, if those changes aren’t built into the contract, the plan is going to get behind.
I also think it's important for companies to have an active insurance committee where employees are involved. A lot of times employees don't understand how expensive health care is, especially if they have a rich plan. We've got some groups at NFP that still have $10 or $20 office co-pays and employees think that's the entire cost. But the remainder of the claim charge that goes to the employer. It's important to educate employees because then they'll take it back to fellow employees and if they hear it from a fellow employee, it's a lot better than hearing it from the boss who, in their eyes may just be trying to save money.
So, long-term strategy, an active insurance committee, and just making sure that, from an employer standpoint, you're letting the consultant know what your goals are. What are you attempting to do? Are you trying to stay within a 10% increase, or a 5% increase? We always tell our clients at NFP we can hit any number you want, it's just a matter of how many changes you want to make to your plan design and what will be passed along to the employees.
How do you best prepare your clients for success when you begin working together?
We do employee meetings to go over the benefit package but then we structure an insurance committee, making sure they have the right people on board. Then we start educating them on how the plan works, what drives the cost, what we can do to help reduce costs. We ask if they have a wellness program that we can use to help incent employees to engage in healthier lifestyles? Is there a telemedicine product that maybe would help them avoid office co-pays and get some claims that don't hit the experience report anymore? We talk about how we negotiate renewals, and talk about how plan design structures work.
We try to meet on a monthly basis with these groups to educate them on how the plan year unfolds. They become the quasi-experts and can bring questions from employees. It makes things a lot easier leading up to renewal if plan design changes have to be made or if there's a rate increase that's not as palatable as in the past. Preparing the committee helps people understand why costs increase and they're not being blindsided. We think that is one of the most important things to do is to get the employees and the leadership and management all at the same table talking about how the plan is running.
You mentioned telemedicine. What role do you think telemedicine plays in a benefits or insurance package?
I think it plays a big role in certain situations. If you're a large group, self-funded and if you don't have a telemedicine product in place, you're making a big mistake. It's good for the employee and it's good for the plan itself. Any group that has a higher deductible plan certainly should have telemedicine. I don't know that we have a self-funded client at NFP that does not have a telemedicine product in place. We have some that probably don't have the right telemedicine product in place and we're working to move them towards that.
First Stop Health has been a home run with the groups that we have put it with. They rave about it. The customer service has been fantastic. But what's nice about First Stop Health is they just make it so easy. They promote it, they provide very good reporting, they make it easy on the employees to use the service. That's what we were looking for in a telemedicine vendor. We've put it with approximately 9,000 employees and we couldn't take it away from them now if we tried.
What should people know about telemedicine providers that they might not even think to ask?
Your telemedicine product needs to be very user-friendly because if it's tough for the employee to use, they're just going to give up. It needs to be free to them. If there's an office co-pay where they've got to go in and set up an account, and give a credit card number, many aren’t going to do that. It's got to be very smooth because people will say “this is too much of a hassle, I'll just wait and go to my doctor” or worse, “I'm just going to go down the street to the urgent care.”
There are also a lot of employers out there that say “we already have a telemedicine vendor and it's through the carrier and it's free” or “it's free to us but the employees pay their co-pay, so it's the same thing” but they don't understand that it's not the same thing.
Employers don't always check utilization because they don't get active reporting. They have to actually ask for it, so they really have no idea if they're getting any utilization or any savings out of the program. What First Stop Health does is proactively send the report so you can easily see the utilization, the savings, the directive savings, that sort of thing.
There are a bunch of telemedicine vendors out there and then there's the carrier embedded ones and we've used them all. The only one that's had any significant utilization impact is First Stop Health.