Maximizing Employer-Sponsored Healthcare: Insights from Gallagher’s Andy Jackson

Introduction

In the latest episode of the “Commercial Carrier Corner” video series, Jared S. Taylor sits down with Andy Jackson, a seasoned consultant at Gallagher. With over 28 years in employee benefits and healthcare, Andy shares invaluable insights on why he champions self-funded health plans and how they can significantly benefit employers and employees alike.

Andy Jackson’s Background

Andy Jackson has been with Gallagher since 2011, following a merger with his own firm. Specializing in employee benefits and healthcare, Andy has focused on self-funding for the past 20 years, delving deep into the intricacies of healthcare plans to maximize their efficiency and cost-effectiveness.

The Case for Self-Funding

Andy emphasizes that self-funding is essentially about managing risk, whether through purchasing insurance or opting for partial self-funding with reinsurance. He believes that self-funding allows employers to remove excess costs and redirect savings back into employee benefits. By eliminating unnecessary expenses, employers can offer more meaningful benefits rather than burdening employees with high deductibles and out-of-pocket costs.

Addressing Common Concerns

Many employers hesitate to adopt self-funded plans due to misconceptions about their suitability for smaller organizations. Andy counters this by highlighting successful implementations for groups as small as 35 employees. Key concerns like large claims and high-cost drugs are addressed through thorough education and appropriate risk management strategies.

Core Components of a Successful Self-Funded Plan

Andy describes a successful self-funded plan as a three-legged stool:

1. Administration: Ensuring the plan is managed by an administrator with robust policies and procedures.
2. Reinsurance Contracts: Securing appropriate reinsurance contracts to cover overall risk effectively.
3. Funding: Adequate funding to build reserves and cover claims in high-cost years.

By following these principles, employers can stabilize costs and enhance benefits over time.

Real-World Success Stories

One standout example is a client with over 300 employees who transitioned from a precarious self-funded plan to a stable, well-managed program under Andy’s guidance. This client built significant reserves, avoided cost increases for over a decade, and even started offering premium holidays and enhanced benefits due to the substantial savings achieved.

Innovative Employee Wellness Programs

Andy’s approach to employee wellness includes removing barriers to care by offering free access to necessary medical supplies and services. By creating a culture of proactive health management, such as regular primary care visits and disease management programs, employers can significantly reduce long-term costs and improve overall employee health.

Reference-Based Pricing (RBP)

Andy is a strong advocate for Reference-Based Pricing (RBP), which he views as a non-disruptive, cost-effective alternative to traditional PPO plans. Through mandatory education sessions, employees learn to navigate RBP plans, resulting in substantial savings and high satisfaction rates.

Conclusion

Andy Jackson’s experience and strategies highlight the transformative potential of self-funded health plans. By focusing on effective risk management, thorough education, and innovative wellness programs, employers can offer superior benefits while controlling costs. Andy’s insights serve as a valuable guide for any organization considering a move to self-funding.