While Congress debates the many aspects of health care reform, one means of reducing insurance costs already helps many US employers keep health insurance premiums at a manageable level.
Call them "benefits consortiums" or "buying groups" or maybe even "co-ops." The idea is to create a larger pool of people to be insured, which reduces the per-person cost of coverage.
"By forming buying groups, employers are able to increase their individual buying power," explained Paula Bilitz, director, Group Life Marketing, Minnesota Life Insurance Company. Cost savings aren't the only benefit. "The economies of scale also apply to processes and information sharing to increase efficiency and reduce waste in administering employee benefits," added Bilitz.
While membership in a buying group can reduce the complexity of providing benefits to employees, it doesn't give member companies the luxury of putting their programs on auto-pilot. The differing requirements of member organizations and the ever-changing regulatory environment force employers to stay vigilant and ensure their specific needs are met.
"Employers and their benefits brokers need to remain involved in the buying process, especially during vendor selection and plan implementation," said Bilitz. "Still, for many companies, buying groups make it easier and less costly to provide benefits for valuable employees."
In a paper available at no charge on its web site, Minnesota Life explains different types of consortiums and offers suggestions for finding the right group. The article, "Buying power: How consortiums are changing the benefits landscape," is part of the company's "Get More" series of white papers for employers and benefits brokers. The series offers strategies for obtaining maximum value from any benefits package.
Securian Financial Group, Inc.