Ultimately, at every level of the healthcare supply chain – insurance carriers, benefits brokers, providers, employers, and end-users – we all need to be creative about ways to contain costs while still supporting health and wellness. So, how can a health insurance carrier provide you with solutions that bring competent and quality healthcare to your employees?
Rising Costs
Employers and employees alike rank health-related benefits as the most important offered – more than paid leave, financial incentives, and retirement planning – and this value is shown in a positive ROI. In 2022, employer sponsored insurance (ESI) drove $275.6 billion in improved productivity, $101 billion reduction in direct medical costs, and $119.2 billion in tax benefits. Additionally, post-pandemic changes to health-related employee benefits include adding valuable services like telemedicine (93% of surveyed organizations) and mental healthcare (91%).
Healthcare costs have outpaced rates of inflation for decades, and we’re expecting this growth to continue, ultimately totaling nearly 20% of the U.S. economy by 2029. Data from the Centers for Medicare and Medicaid Services (CMS) indicate an increase in health spending tripled between 2000 and 2022 to $4.5 trillion. While multiple factors contribute to this growth, often cited are an aging population, labor pressure, and new high-cost prescription drugs.
In fact, we can see the cost of care increases reflected in the rising insurance costs over time with the average per-employee cost reaching a record high in 2023. Developments in the pharmaceutical market are apparent, with the pharmacy benefit cited as the fastest growing component of plan cost. Large employers have been mitigating these increases by increasing deductibles and out-of-pocket maximums, but this trend is difficult for the mid-size businesses to manage, as they’re subject to certain regulations but tend to have less ability to allocate additional resources to their employee benefits package.
What is Max Performance Plus?
Carefirst launched Max Performance Plus on June 1, 2024 as an add-on to a fully insured benefit that allows employers to receive a surplus of net-billed premium not used over the plan year. It’s essentially a funding mechanism that allows you to take a fully-insured product and adds the potential to receive 100% of the surplus, up to 15% of the net premium, at the end of the contract period.
The Max Performance Plus program carries a higher risk premium charge (a.k.a. retention item) and can be sold with any fully-insured Carefirst medical or prescription drug plan. It’s not a separate plan, it’s an add-on to the Carefirst fully-insured product portfolio. While you cannot cancel mid year, you can opt to remove the Max Performance Plus product at renewal and still continue with your fully-insured plan.
In contrast to a self-insured product, Max Performance Plus takes your current fully-insured product and adds a performance element. Many groups want to know how they are performing as a group. By adding Max Performance Plus, employers get the reporting function for more information about performance, while getting surplus back as a payment.
Remember, with a self-insured plan, the employer pays claims beyond what insurance will cover, up to a pre-set amount. Performance reporting allows groups to track that claim activity. Mid-size groups 50-150 employees are often not able to take full advantage of all of the self-insured product’s benefits, and these plans calculates surplus potential as a percentage of an administrative credit.
Surplus Payment
It typically takes 60-110 days to finish paying claims after the end of the plan year. At that point your surplus payment is given as a check or electronic funds transfer – not just a premium credit. Groups are eligible to receive their surplus payments as long as they remain in a fully-insured product with Carefirst and have paid in full – even if they decide not to renew the Max Performance Plus program. Deficits do not affect the surplus payment, nor do they carry forward.
Reporting
Groups of 51-99 employees using this program will have access to monthly reporting features they wouldn’t otherwise have on a fully-insured plan; Executive Summary and Account Experience Reports are easily access via the employer portal under Account Insights. Larger groups, which previously had access to reporting, will also see additional performance data around demographics, cost analysis, utilization, site of care, high-cost claimants and pharmacy use. The reporting data gives employers information that can help inform and educate employees about more cost-effective healthcare choices, such as the value of in-network providers and avoiding expensive ER visits for urgent care needs.
