Self-Funded w/ Spencer - Episode 27 - Geniece Brunson

This episode provides an in-depth discussion with Geniece Brunson, a Principal at EPIC Insurance Brokers, focusing on her 16-year career in employee benefits consulting, the shifts in the self-funding landscape, and the critical challenges facing the industry, particularly claims control and transparency. Brunson emphasizes her role as a "problem solver" and "numbers person," detailing how she leverages deep analysis and vendor collaboration to manage costs for self-funded clients. The conversation also touches on the aggressive aggregation occurring in the brokerage space and the necessity of continuous innovation to stay ahead of rapidly evolving solutions.

A key theme explored is the increasing complexity and cost of healthcare benefits, specifically the unsustainable annual claims trend of 6% to 9%. Brunson highlights the difficulty in controlling costs due to systemic issues in billing and a lack of transparency, noting that fully insured plans are inherently profitable for carriers. This has driven the trend of self-funding downstream, with groups as small as 150 employees now exploring level-funded or self-funded options, provided they have the necessary cash flow and risk appetite. The discussion underscores the importance of the advisor's knowledge in properly pricing risk and managing catastrophic claims exposure for these smaller groups.

Brunson details the collaborative and objective approach at EPIC, which contrasts with firms that white-label solutions. EPIC maintains a neutral stance, utilizing dedicated teams for vendor vetting (including payroll and benefits administration systems) to ensure clients receive the best-fit technology rather than proprietary solutions. A significant operational insight shared is the acquisition of PSG, a large pharmacy consulting firm, which allows EPIC to tear apart and optimize pharmacy programs for large self-funded groups. This process involves creating detailed recommendations, even for incumbent PBMs, to clean up contracts and protect the employer from excessive costs. Finally, the speaker addresses the challenge of employee engagement, stressing the need to differentiate between "culture tools" (feel-good perks) and advocacy tools that offer demonstrable ROI by guiding employees toward lower-cost, high-quality care options.

Key Takeaways:

• Self-Funding Trend Downstream: Self-funding is increasingly accessible to smaller groups (e.g., 150 employees) via level-funded arrangements. However, successful implementation requires meticulous analysis of cash flow, appropriate pricing, and a clear understanding of the employer’s risk tolerance to absorb catastrophic claims.
• Pharmacy Program Optimization is Critical: For self-funded employers, actively tearing apart and optimizing pharmacy benefit programs is essential for cost control. This involves deep contract analysis and creating specific recommendations to ensure the employer is protected from unfavorable PBM practices.
• Claims Trend is Unsustainable: The industry faces a significant challenge with annual claims trends running at 6% to 9%, making it difficult to sustain benefits costs. Brokers must act as problem solvers, leveraging data and national underwriting resources to pull plans apart and justify renewals based on actual claims experience.
• Regulatory Impact on Operations: Legislative changes like the ACA (minimum value, actuarial value) and the No Surprises Act fundamentally change the operational landscape for employers, requiring constant learning and adaptation in plan design and compliance.
• Neutral Vendor Vetting Strategy: A best practice for consulting is maintaining complete neutrality when vetting technology and administrative systems. Firms should avoid white-labeling proprietary systems and instead use dedicated teams to find the optimal payroll, benefits administration, and HR technology solutions for the client’s specific needs.
• Differentiating HR Tech ROI: When evaluating new employee tools, consultants must determine if the client seeks a "culture tool" (focused on employee thank-you/engagement) or a tool with measurable ROI (e.g., advocacy programs that drive employees to lower-cost providers).
• Importance of Employee Advocacy: To control claims costs, employers must implement advocacy solutions that educate and incentivize employees to become better healthcare consumers. Proven ROI can be achieved by guiding employees to clinics offering significantly cheaper services (e.g., $700 savings on an MRI).
• Broker Collaboration Over Competition: The internal culture of a brokerage firm should prioritize collaboration among producers (e.g., weekly accountability partnerships and vendor spotlights) over internal competition, ensuring clients benefit from collective expertise and the latest market insights.
• The "Never-Ending" Fourth Quarter: The speed of the industry, driven by compliance deadlines and the necessity of year-round strategy development (watching claims data constantly), means the traditional seasonal slowdown following renewals no longer exists.

Key Concepts:

• Self-Funding: An arrangement where the employer assumes the financial risk for providing healthcare benefits to employees, paying claims directly rather than paying a fixed premium to an insurance carrier.
• Level-Funded Group: A hybrid approach often used by smaller employers, where the employer pays a fixed monthly amount that covers administrative fees, stop-loss insurance, and expected claims. If claims are low, the employer receives a refund.
• ACA (Affordable Care Act): Legislation that introduced requirements like minimum value and actuarial value, significantly impacting how employers design and price their health plans.
• No Surprises Act: Legislation aimed at protecting consumers from unexpected medical bills from out-of-network providers in emergency situations or certain non-emergency settings.
• PBM (Pharmacy Benefit Manager): Third-party administrator of prescription drug programs for health plans. The speaker emphasizes the need to scrutinize PBM contracts to control costs.

Tools/Resources Mentioned:

• BombBomb: A video messaging platform used for personalized outreach and prospecting, noted for its ability to track engagement (though the speaker admitted to early trial failure).
• Calendly/Bookings: Scheduling tools used to streamline appointment setting via email integration.
• LinkedIn Video Feature: Used as a personalized outreach tool for prospecting.
• PSG (Pharmacy Consulting Firm): Acquired by EPIC, used to provide specialized, deep-dive analysis and optimization of client pharmacy programs.