Alliance Resource Partners, L.P. the third-largest U.S. coal producer, is seeking new ways to tackle health care costs in its self-funded plan.
Despite selling 38.8 million tons of coal last year, Alliance Resource Partners wanted to move ahead of the pack when it comes to its health care spend, said Paul Mackey, vice president of human resources, during the Benefits Forum & Expo held recently in Boca Raton, Fla. He explained that the company tried its hand at onsite health care delivery to help drive down care and premium costs.
Wellness in our company means health care onsite, he said, adding the company uses nurse practitioners, physicians and arrangements with the University of Kentucky and Cleveland Clinic.
Alliance Resource Partners, where employees average tenure with the company is 12 years, spends $21,000 per year on an employee family. Meanwhile, 4% of its workforce consumes roughly 45% of its annual health care spend, Mackey explained.
Its not about how much money we are spending. For me, theres a whole lot of harm happening with the excess amount of spending that has happened, he said. Health care is episodic, its random, its uncoordinated, [and] to manage that 4% were going to have to change this.
Because in-patient medical spend has been out-of-control for Alliance Resource Partners, with costs having more than tripled since 2010, Mackey is somewhat optimistic for the companys proactive interventions. He noted that new health care resources which involve telemedicine, use of home medical devices to measure health status, and having nurse practitioners at rural and secluded mine sites may be a saving grace but its still too early to tell. Is it going to work? I dont know. I know if we dont do anything about it, its going to get worse.
Samuel Fleet, president and CEO of AmWINS Group Benefits, a wholesale broker and group insurance administrator, told BFE conference attendees that Alliance Resource Partners achievement in self-funding could help serve as a guide to other employers. But until there is substantial change in employer health plan structures, he confessed that the root of the problem is Americas broken health care system.
When you think about health care and health care financing, its been controlled by the financing sides of the plan, explained Fleet. The health plans and insurance companies have controlled how we access care and how its funded.
The key to success in the self-funded world is really to bend the cost curve, Fleet explained, but noted that its a leap of faith if employers fail to cull enough data about their insured risk profile to ensure self-funding is the right direction to take.
The Kaiser Family Foundation finds that self-funded arrangements, which are when employers assume direct financial responsibility for employee medical claims, are on the rise. According to the KFFs 2014 Employer Health Benefits Survey, the percentage of covered workers in partially or completely self-funded plans has increased by nearly 20 percentage points over the past 15 years to 61% in 2014. Because these plans are typical for large employers, more than 83% of firms with more than 1,000 employees and 91% of those employers with more than 5,000 employees self-fund their plans, according to KFF data.
But there is opportunity in the smaller employee segments as well, as only 15% of companies with less than 200 employees self-insure.
Theres been a lot of noise around the Affordable Care Act, and you should expect that noise is going to continue for this enrollment period, as well as many more to come, said Fleet.
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