The Future of Group Health Insurance

A man and woman utilize AI while reviewing a clipboard in insurance underwriting.

From AI in insurance underwriting to the future of employee benefits, there is much for employers to consider regarding their employee plans.

The latest trends in group health insurance include self-funding, captives, and new options for sharing risk.

In this post, we’ll take a closer look at how these may affect you and where you can turn to for help with all of it.

The Future of Group Health Insurance

The future of group health insurance is changing. As group health insurance brokers, we watch these trends closely to gather insights that benefit our clients.

There are a few areas that we are watching particularly closely: AI Underwriting, Risk Mitigation, Self-Funding, Captive Health Insurance, and Insurtech. Let’s look at each to see how they may affect you.

AI Underwriting

Artificial Intelligence (AI) is transforming our world, sculpting it into a planet run on automation. In the group health insurance sector, AI enables insurers to do many things for their plans, including gaining deeper insights into their customer database. Data-driven details previously impossible to access through traditional underwriting are now available.

The result is an easier time analyzing large volumes of data, including customer demographics and preferences, which helps companies quickly identify trends in risk profiles.

AI is exceptional at identifying patterns. And its ability to identify unique data sets helps insurers make informed decisions about policy terms, pricing strategies, and risk models.

Real-time insights are also available, which reduces the time required to make decisions and respond to market changes. Keeping customers covered at a fair price is the goal insurers have when using this data.

Creating tailor-made policies is the ultimate benefit of the AI underwriting trend.

How Can Insurers Prepare to Use AI?

Some tips include:

  • Leveraging chatbots and intelligent assistants
  • Taking another look at existing processes to see where automation makes sense.
  • Gain insights into the legal implications of using AI, including Privacy Laws.
  • Training employees in the technology and preparing them for any shifts.

Risk Mitigation

Another trend affected by AI is risk mitigation. The systems provided by AI can analyze large chunks of data to help insurers understand the outcomes of various scenarios.

With better insights into their risks, insurers can make better decisions for themselves and their customers.

The result is better insurance coverage designed to benefit the group health insurance policy employees are creating.

Self-funded insurance provides flexible alternatives to traditional fully funded insurance, making it an increasingly popular option for employers.

Research shows that between 1999 and 2023, the percentage of employees covered by self-funded plans increased by some 20 percent.
 

Despite this, most small business owners believe they don’t have the resources to cover Self-Funded plans. However, the group medical captive model is changing opinions on self-funded plans.

One of the reasons why self-funding is beneficial is because it shares risk. We will talk more about the captive health insurance model next, but remember that the benefits include greater purchasing power and lower administrative costs.  

Captive Health Insurance

 

Captive health insurance requires companies to pool resources to create their own insurance company. From there, every company contributes premiums to the captive, which covers members’ medical expenses.

Some of the most significant advantages of captive insurance are control over plan design and underwriting details. The result is a tailored approach to risk management.

Participating employers tend to look for a greater degree of flexibility, control, and transparency over plan design and health costs.

Employers connect to manage plan obligations and health costs as they share the rewards of more flexibility and autonomy. Member employers are in a greater position to reimagine their health plan’s value and stabilize its pricing.

Costs Associated with Captive Health Insurance Models

Employers must be self-insured to participate in captive health insurance models. This will eliminate some insurance carrier and state-mandated costs, premium taxes, and carrier risk charges.

Additionally, using value-based plans and networks or risk management programs to connect with employees, manage risks, and reduce costs is also a good cost control idea. These strategies generally help reduce claim costs and improve cost and claim trends.

Sustained cost reductions and savings allow members to re-invest back into their employees and organizations.

Employee Premium Contributions

In 2021, the average employee contributions increased by 7.2% to $1,643 for single coverage. While the reasons for increased contributions are unclear, it is a good statistic for employers to be aware of.

Add to this, the average premium was around $7,380 for single coverage, representing a 3.2% increase over 2020.

How Group Health Insurance Brokers Can Keep You On Track

While you can research what you should know about group health insurance, group health insurance brokers can keep you on track in multiple ways.

First, they have industry knowledge that employers do not. They help you stay compliant, understand regulations, and what your plan options are.

Second, they can also help with cost management and negotiation. They will leverage their industry expertise and relationships to help you control costs.

Third, brokers also assist you with renewal and plan management strategies. They will negotiate renewals and recommend adjustments.

We can help you with all this and much more. If you’re ready to get up to date with the latest trends in group health insurance, we’ll set you up for success.

Contact us to learn more about the latest trends and the future of group health insurance, or to improve your plan.

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