In Focus

News & Insight from Chelko Consulting
No Joke: Money Back from the Insurance Company

No Joke: Money Back from the Insurance Company

Individual stop loss insurance is an important way that many employers with self-funded health plans manage the financial risk associated with their large claimants. If you fall into this category, you’re probably no stranger to large stop loss rate increases following years of poor large claim experience. read more…

Keeping Score: Net Cost per Script

Keeping Score: Net Cost per Script

While it might not appear to be a telling indicator, net cost per script can quickly reveal a great deal about your current prescription drug plan performance.

The number can range substantially based on plan design, drug mix, and your current PBM deal. A high cost in this area could be an indication of excess prescription drug spend or issues with your current PBM arrangement.

How does your plan compare? Let us know if you would like to gain more insight into this spend and ways to manage costs.

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Do Your Employees Understand their Health Insurance Choices?

Do Your Employees Understand their Health Insurance Choices?

Whether we admit it or not, this question has crossed the mind of many a benefits professional — especially as most of us head into open enrollment season. After all, if employees don’t understand their health plan options and appropriate factors to consider in the selection, they could end up making a costly mistake.

Ensuring employees are well educated will not only help them make the right choice, but ultimately lead to increased engagement and productivity. read more…

Only PBMs Benefit from Rebate-driven System [UPDATE]

Only PBMs Benefit from Rebate-driven System [UPDATE]

UPDATE: The following piece was originally posted to Linked In by Rick Chelko on June 28, 2018. Shortly thereafter, Rick met with a senior Health & Human Services (HHS) official working on drug pricing reform to discuss this and related issues. Ironically, the official expressed concern that the marketplace might view the removal of safe harbor protection for rebates to be “a windfall for Big Pharma.”

Nonetheless, we were pleased to see the Office of Inspector General (OIG) and HHS submit a proposed rule change on July 18 to the Office of Management and Budget (OMB). This proposed rule appears to remove the safe harbor protection for prescription drug rebates under the Federal Anti-Kickback Statute. If and when the rule will be finalized is unclear, as is the effective date. Here’s hoping that it will be soon.

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Keeping Score: Members per Employee

Keeping Score: Members per Employee

In our most recent employer data collection efforts, we discovered many fascinating insights. One of those being the importance of understanding and managing your member ratio ― the number of members enrolled for every employee enrolled. The data showed a strong correlation between the member ratio and per employee per year (PEPY) health plan costs ― about $500 for every 0.1 change in the member ratio.

A high ratio may be the result of plan design, ineligible members enrolled, or just a factor of your plan’s demographics. Understanding your member ratio, the root cause, and how to manage this number is critical to controlling plan costs.

How does your plan compare? Let us know if you would like to gain more insight into this spend and ways to manage costs.

read more…

Keeping Score: LTD Income Replacement Benefit Percentage

Keeping Score: LTD Income Replacement Benefit Percentage

The prevailing income replacement benefit percentage in Long Term Disability (LTD) plans is 60%. Roughly 62% of LTD plans proved a 60% benefit level. The next, but far less common, benefit levels are 50% and 67%. Likewise, the use of a 24-month “own-occupation” disability definition dominates the market with about three out of every four plans using this definition.

How does your LTD coverage compare? Let us know if you would like to better understand your disability benefit options and what you can do to manage these programs.

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Deep Dive Roundtable Makes a Splash

Deep Dive Roundtable Makes a Splash

We believe employers who know their numbers make better plan decisions. We also believe there is value in employers talking to each other about their respective challenges and solutions.

These are the fundamental principles behind our annual “Deep Dive” Roundtable in Columbus. It’s a simple concept really — as plan managers, it’s important to understand what’s driving costs. But tracking and analyzing health plan performance data can occasionally get lost in the recurring waves of vendor implementations and renewals, wellness events, open enrollment, HRIS system changes, or whatever else is the benefits priority of the quarter. read more…

Keeping Score: Specialty Drug Spend through Medical

Keeping Score: Specialty Drug Spend through Medical

Most benefit managers recognize specialty drugs as the primary cost driver in their prescription drug benefit programs. However, when asked, they don’t know how much they are actually spending on specialty drugs within their medical benefit.

It really isn’t their fault, the TPAs and insurance companies aren’t very good at reporting it (which might cause you to question their ability to manage it). As such, little attention has been focused on the medical portion, even though it generally accounts for more than a third of plan spend on specialty drugs*.

How do your plan results compare? Let us know if you would like to better understand the specialty drug spend in your plan, and what you can do to manage it.

read more…

Right to Try: Beneath the Surface

Right to Try: Beneath the Surface

A bill allowing patients with serious illnesses to try unproven experimental treatments has been approved by Congress and is now on its way for signature by a supportive President.

For the sake of this discussion, let’s put aside some of the safety and ethical concerns. On the surface, everything may seem palatable from a plan sponsor perspective. But that’s until you start pondering some of the potential issues lurking beneath the surface. read more…

CONTACT
Cleveland Office
24651 Center Ridge Rd, Suite 110
Westlake, Ohio 44145

Phone: 440.892.2600
Fax: 440.892.8920
Email: info@chelkogroup.com

Columbus Office
Phone: 614.869.4140

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