Peanut butter and jelly. Romeo and Juliet. ESOPs and direct partnership health plans.
Some things just belong together.
Companies that offer Employee Stock Ownership Plans (ESOPs) know the value of collaboration. When employees gain ownership of company shares, they also gain a vested interest in the long-term prosperity of the company, contributing to better engagement, greater productivity, and a superior work environment in which everyone is part of a team.
With a direct partnership, these companies can now leverage that sense of teamwork to create a better, more sustainable employee health plan.
What Is a Direct Partnership?
A direct partnership is an innovative but simple approach to employee health benefits in which employers contract directly with community health systems. Instead of relying on a carrier for coverage and provider networks – and instead of letting the carrier call all the shots – employers take control of their health benefits.
Cutting out the carrier has a major impact. When employers switch to a direct partnership plan, they typically see savings of at least 20% to 30%. But this isn’t just a short-term option with temporary gains. A direct partnership is a sustainable benefits strategy, and the average renewal increase is just 1.9%.
Beyond financial savings, the direct partnership model also gives employers greater control over their benefits. By removing the carrier from the equation, you can give your employees robust coverage and even $0 deductibles. You can also reinvest your savings into your benefits.
Is a Direct Partnership a Good Fit for Your Company?
A direct partnership is not always easy. It’s a form of self-funding, so employers that go this route have to be accountable for their benefits. They also need to set up various vendors, like a pharmacy benefits manager and a third-party administrator. Getting everything in place takes some work, but once it’s done, there are many benefits.
While a direct partnership plan isn’t a good fit for every employer, it can be perfect for employers that want to take control of their benefits – especially companies that already offer ESOPs.
Why ESOPs and Direct Partnerships Are the Perfect Match
Companies that offer ESOPs have already taken an innovative approach to employee benefits in order to boost employee engagement and improve retention. Now it’s possible to apply the same philosophy to health benefits.
Here are two reasons why companies that use ESOPs should consider switching to a direct partnership for employee health benefits.
1. It’s the next logical way to level up benefits.
You’re already offering a great retirement plan, but that may not be enough. Most workers depend on their employer for health coverage, and a survey from Intuit QuickBooks and Allstate Health Solutions found that 78% of employees would switch jobs for better benefits.
By switching to a direct plan, you can reward your employees with high-quality health benefits, giving them one more reason to stay loyal to your company.
2. Your employees are already motivated to make it work.
With a direct partnership plan, you can utilize careful, tiered plan designs to steer members toward cost-effective care options with direct partnership providers, but ultimately, the member decides where to receive care. If employees choose care options that are not cost effective, they’ll pay more out-of-pocket, and the company will also pay more.
With an ESOP retirement plan, your employees already have a financial stake in the success of your company, so they are highly motivated to see it thrive. They’ve also accepted ownership of the company. They’re not just employees. They’re partners.
This mindset makes it much easier to get employees on board. If you show them how the direct partnership can benefit them, their families, and the company, they’ll likely be receptive, and they’ll want to learn how the plan works and how to use it effectively.
Take Control of Your Health Benefits
Self-funding is a good start, but if you’re still relying on carriers for things like provider networks, you’re still giving them power over your plan. With a direct partnership plan, you can give your team ownership over the structure and management of their health plan.
Want to know more? Contact H2B – we can help you explore the advantages of a direct partnership plan. Learn more.
