As health premiums continue to rise, employers are tasked with finding a way to provide coverage while keeping costs manageable. That has resulted in a move toward high-deductible health plans and shifting more of the responsibility onto employees.
“We’re in a takeaway phase,” says Sharon Bohlman, president of Strategic Benefit Solutions, Corporate Benefits and HR Advisors. “Costs keep escalating off the charts.”
Employers rely on their broker to accomplish the goal of reining in those costs. An often overlooked solution is targeting employees with a military background.
With about 9.5 million beneficiaries, TRICARE covers active duty servicemembers, National Guardsmen, reservists, retirees and their families. Adding TRICARE’s supplemental coverage is one way to lower costs by removing retired military employees from the employer-sponsored plan.
The supplemental plan, which is an easy add-on that can be implemented at any time, helps keeps claims down, Bohlman says. After serving for at least 20 years, many retired military seek employment as civilians around age 50, right when large claims begin for most of the population. Whether they’re healthy or not, none of the costs go toward the employer’s medical spend, she says.
No matter how many or how few of an employee population are retired military, anyone who can be served by another plan saves the employer money, Bohlman says. “The potential for savings is huge,” she says. “A number can’t even be defined.”
Not only does it benefit employers by reducing costs, it’s also a way to show appreciation for those who have served, Bohlman says. “This is a gift you should be giving them,” she says. “It’s part of what they earned from being in the military.”
Offering a TRICARE supplement plan is a win-win — which is rare in the benefits world — it saves employers money and is typically a richer, less expensive plan for participants than the one offered by the employer, Bohlman says. “This is a situation where literally there is no loss,” she says. “A good broker should be concerned not only for the employer, but also for the employee.”
Brokers can be the impediment
Offering this plan can increase a broker’s book of business, however, brokers themselves are often the impediment, says Jim Campbell, president and CEO of Axim Global Strategies Group, LLC. Some brokers aren’t offering the TRICARE supplement because they don’t know it exists, but many opt for selling more lucrative products, he says.
Solely worrying about compensation is “not being a true fiduciary,” says Campbell, who served in the U.S. Marine Corps for more than six years. Selling TRICARE can lead to other business, which is something Campbell sees all the time.
Brokers his firm works with are taking business away from larger brokerages because they are increasing their value by offering such plans, he says. “It’s a great way for clients to recognize value,” Campbell says. “You could be the broker of choice across a much larger pool.”
Brokers are starting to recognize that value and TRICARE’s ability to serve as a viable revenue stream, Campbell says. “We’ve seen a huge uptake in it,” he says. “We’re seeing a lot of brokers we work with getting big wins from this.”
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