A Health Insurance Alternative for an Energy Sector in Desperate Need of Relief
By: Richard Walton, GBA, CSFS
In my ten years in the health insurance industry, I have never seen a decrease in the cost of health insurance. While this is no surprise to anyone, it represents a massive burden on employers. The Affordable Care Act has capped the amount you can charge an employee, but the employer is granted no such favor. The chart below represents employee only premium levels from 1999 through 2016. It is clear to see that the level of premium increases is not sustainable, and it hits the energy sector at a particularly hard time.
There are several reasons for this steady rate of increase, some are complicated and some are very simple. Insurance carriers are not the solution to the problem, nor is government policy.
An Alternative to Insurance Carriers: A Multi-Employer Welfare Arrangement (MEWA) is essentially multiple employers coming together to create their own insurance plan. It acts as a large self funded health plan, and is owned and managed by the participants in the MEWA. While this might seem trivial, it is in fact a huge benefit. Having decisions made by participants in the MEWA causes incentives to align. The LoneStar Employee Benefit Trust is governed by a five member Board of Trustees to represent all members, manage their interests, and be fiscally responsible for rates and benefit plan options. When, if ever, was the last time you believed a health insurance company was more concerned about you and your employees than with its profits?
Some of the benefits of this arrangement are:
- Purchasing Power
- No insurance carrier profits - MEWAs operate as non-profits.
- Long term rate stability
- The smallest of employers can benefit from self-funding with NONE of the risk.
Announcing the Lone Star Energy Employee Benefits Trust: The LoneStar Energy Employee Benefits Trust is a newly formed MEWA to meet the needs of Texas employers in the energy sector. It is an alternative to coverage through traditional insurance carriers and was formed with the goal of investing all underwriting profits back into the plan through lower rates or enhanced benefits. When you become a member of LoneStar Energy Employee Benefit Trust (LEEBT), you and your employees become a part of a health plan that is run by, run for, and run in consideration of the needs of its participant-owners. The LEEBT is fully ACA compliant and you can choose from 18 different plan designs. Each group is rated based on their own merit, and the risk is spread across all groups. Unlike other self-funded plans, you will not receive a bill for additional funds in the event of a bad claims year.
While there is a very good chance that employers will realize premium savings on the first year, the true benefits of joining the LEEBT are realized over several years of renewals with a MEWA owned by its participants.
How to get a quote: The LoneStar Energy Employee Benefits Trust is now open for quoting for 11/1 effective dates. Quotes can be generated 45 days out, and typical turnaround time is 72 hours. Contact us today at (806-376-6301)
Posted on October 12, 2016
by Elizabeth Carter