Vitori Health

January 26, 2023

3 min

As healthcare costs continue to rise, many employer health plan sponsors struggle to cover their employees without breaking the bank. Unfortunately, many keep returning to the same old solutions: a monopoly of legacy insurance carriers with high-priced plans and suboptimal benefits and member support.

While these carriers may seem like the easiest option, they are not the best choice for employers or their employees. To clarify why employers should consider shifting to a modern, less costly, higher quality medical and pharmacy administrator, let’s debunk the top 5 excuses employers use to justify sticking with these carriers, including the myth that employees will resist the change.

Excuse #1 | Our Current Carrier Has the Most Experience

A legacy carrier may be well known within the industry and have decades of experience. But the real question is whether that experience serves the best interests of employers and plan participants by reducing costs and improving quality.

This is rarely possible because of conflicts of interest, legacy economics, and dubious business practices. In contrast, a modern administrator is free from such constraints and therefore able to reduce claims expense while offering higher value plans.

Excuse #2 | Our Current Carrier Offers the Most Comprehensive Coverage

A side-by-side comparison will quickly reveal that this is not the case. The coverage provided by a modern administrator is better, more flexible, and more affordable, ensuring that employees receive the care they need with lower out-of-pocket expenses and better support.

Additionally, coverage offered by a modern administrator includes advanced claims cost control technology, transparency, improved plan features, and enhanced member services that cannot be obtained from outdated insurance carriers.

Excuse #3 | Our Current Carrier Has the Most Established Provider Network

In reality, the “established” provider networks of status quo carriers are generally indistinguishable from one another. Their negotiated arrangements are more costly for employers and patients than direct pay or cash pricing, which is hardly a compelling value proposition or reason to stay.

The open access plans and flexible networks offered by a modern administrator allow employees to choose from a wider range of providers without the out-of-network penalties imposed by the old carriers. The result is a more affordable plan that allows members to keep their current doctor-patient relationships and does not restrict access to high quality care.

Excuse #4 | Our Current Carrier is the Only Option to Meet Our Needs

One of an employer’s most pressing needs is to reduce escalating year-over-year health plan costs. This simply cannot be accomplished by sticking with status quo insurance carriers.

A modern administrator is built from the ground up to provide higher-quality, lower cost health plans and a better member experience. Plans are more flexible and better suited to the varying needs of employers. And they deliver sustained expense reduction and future cost controls with less financial strain on employees.

Excuse #5 | Our Employees Will Resist Change

It is a common misconception that employees will resist changing to a modern medical and pharmacy administrator. Companies that make the shift report higher net promoter scores, confirming that the vast majority of employees are happy to drop their legacy plan in favor of one that reduces their out-of-pocket expenses and provides better coverage and member support.

Employees need to be educated about the benefits of updating to a more affordable, next-generation plan that includes increased provider access, built-in medical and pharmacy cost-saving features, and personalized member services. They also need transparency about what’s involved in switching from a legacy carrier to a modern administrator.

In reality, the change is no more onerous than switching between legacy carriers—something employers do, on average, every two to three years. The biggest and most welcome difference for employees is that changing to a modern administrator can improve benefits and reduce financial risk.

Final Thoughts

Today’s environment demands that employers and their boards of directors fulfill their fiduciary duty to plan participants by seeking out a less expensive, modern alternative to outdated legacy insurance plans. This is especially crucial in an inflationary economy where every dollar overspent on healthcare is a dollar that can’t be used for business growth and talent acquisition and retention in the form of enhanced compensation, benefits, and other employee resources.

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