Author Archives: CorpStrat News

Why Is Employer Sponsored Health Insurance So Complex? (And How That Complexity Protects You)

young woman confused using laptop

If you’ve ever felt overwhelmed trying to understand your benefits – specifically your health insurance, you’re not alone. Between the acronyms, the fine print, and the seemingly endless rules, navigating health coverage can feel like a full-time job. But beneath the complexity lies an important truth: many of these layers exist to protect you — the employer and the consumer — and to keep the system fair and accountable.

A Web of Regulations Designed to Protect

Employer-sponsored health plans aren’t governed by just a handful of rules — they’re subject to dozens of federal laws. According to BenefitsPro, at least 46 federal laws apply to some employer health plans, and 42 apply even to self-funded ones. That’s in addition to state-level regulations and guidance from multiple government agencies.

Each law adds a piece to the puzzle — whether it’s about what must be covered, how claims are processed, how your data is protected, or how insurers must behave. It’s no wonder employers and employees alike often find the system hard to decipher.

Add that to the rating complexity created by the ACA – where most states have age rated and location rated plans – based on each particular plan and participant age, and you have a heck of an administration challenge to boot!

Complexity with a Purpose: Consumer Protections

Even though it can be confusing, much of this regulation exists for your benefit. Here are just a few of the ways the law works in your favor:

  • Coverage You Can Count On
    The Affordable Care Act (ACA) requires insurance companies to cover people regardless of preexisting conditions. This means you can’t be denied care because of your health history — a major shift from the past.
  • Essential Health Benefits
    The ACA also defines 10 essential health benefits — including maternity care, mental health services, and prescriptions — that must be included in most plans. These protections ensure coverage is not just available, but meaningful.
  • Accountability for Insurers
    Rules like the “medical loss ratio” ensure that insurers spend most of your premium dollars on actual care — not just overhead or profits. If they don’t, you may get money back in the form of a rebate.

State Rules Add Another Layer

On top of federal laws, each state has its own insurance department that oversees insurers operating locally. States can add additional requirements or consumer protections, which further contribute to the complexity — but also enhance fairness, transparency, and access to care. California has more of these additional requirements than any other state,

Why It Matters

All of this regulation might make health insurance feel difficult to understand, but the intent is clear: to ensure that plans are reliable, insurers are accountable, and consumers are treated fairly. These rules:

  • Safeguard your right to coverage
  • Help keep costs transparent
  • Provide standards for what must be included in your plan
  • Hold insurance companies to high standards

Final Thoughts from CorpStrat

Employer Sponsored Health insurance isn’t complex by accident — it’s complex by design. At CorpStrat, we help employers and employees cut through the noise and make sense of their benefits, because understanding the “why” behind the system empowers better decisions.

Need help navigating your benefits strategy or simplifying your company’s insurance plan?

Connect with us today at www.corpstrat.com, or call (818) 377-7260.

We simplify the complex — so you can focus on your people, your business, and your future.

Exploring Level-Funded Health Plans for Small Groups

sick woman telehealth

Health insurance costs continue to rise, making it increasingly difficult for small businesses to offer competitive benefits while managing expenses. In response, level-funded health plans are gaining traction as a cost-effective alternative to traditional fully insured options. Major carriers, including UnitedHealthcare and Anthem, have expanded their offerings in California, particularly for groups under 100 employees, making it easier for small businesses to explore self-funded solutions with built-in cost controls.

While these plans present attractive savings opportunities and flexibility, they also come with challenges—most notably, the difficulty in truly impacting claims costs when employees struggle to negotiate care or access providers in urgent situations.

Why Are Level-Funded Plans Gaining Popularity?

Level-funded plans have historically been more prevalent in Northern California, where HMO options are scarce and PPOs are significantly more expensive than in Southern California. However, with rising healthcare costs across the state, these plans are expanding their footprint and becoming a more viable option for small and mid-sized businesses looking for greater control over healthcare spending.

Here are some key reasons behind their growing appeal:

1. Cost Predictability with Potential for Refunds

Unlike traditional self-funded plans that expose employers to unpredictable claims costs, level-funded plans offer fixed monthly payments, making budgeting easier. If claims are lower than expected, businesses may receive a refund on unused claims dollars, creating a financial incentive to promote healthier employee behavior and cost-conscious care utilization.

2. Flexibility in Plan Transitions

One of the biggest concerns for small employers considering self-funding is what happens if it doesn’t work out. Traditional self-funded plans can create long-term risks, as claims history might impact future coverage options. However, level-funded plans allow small groups to return to ACA plans without their claims experience affecting their future rates, making the transition much less risky.

3. Growing Carrier Participation

Previously, level-funded plans were limited in availability, but major carriers have aggressively expanded their offerings. Anthem Blue Cross now provides level-funded options to groups as small as 25 employees, sometimes even allowing employers to keep an HMO plan or pair it with Kaiser, provided they meet participation requirements.

4. Opportunity for Customization

Unlike traditional fully insured plans, which offer limited flexibility, level-funded options allow businesses to tailor benefits to their workforce needs. This includes selecting narrow networks, incentivizing telemedicine usage, or implementing wellness programs to help lower claims costs over time.

The Challenge: Impacting Claims Costs in Real Time

While level-funded plans offer the promise of savings, their true financial benefits hinge on controlling claims costs—a challenge many small businesses struggle with due to limited employee ability to negotiate care.

Here’s why:

1. Employees Often Lack Negotiation Power in Urgent Care Situations

When employees need immediate care, they are unlikely to shop around for the lowest-cost provider. They often go to the nearest urgent care or ER without considering cost variations. Without strong navigation tools, this behavior can lead to higher claims costs that could impact the employer’s financial risk in a level-funded plan.

2. Limited Access to High-Value Providers

Although some level-funded plans steer employees toward preferred providers to help manage costs, finding in-network care can still be a challenge—especially in certain regions where provider access is limited. Employees may end up seeing out-of-network doctors, leading to unexpected higher claims that drive up costs for the employer.

3. Lack of Awareness on How to Utilize Benefits Wisely

Many employees aren’t aware of cost-saving strategies, such as utilizing telemedicine, urgent care instead of ER visits, or prescription discount programs. Without proper education and engagement, employees may not make cost-effective decisions, reducing the financial advantages of a level-funded plan.

What Can Employers Do?

For level-funded plans to be successful, employers must take a proactive role in helping employees manage healthcare costs. Here are some strategies that can help maximize savings and improve the overall effectiveness of these plans:

1. Implement Strong Employee Education Programs

Businesses should offer ongoing education to help employees understand when and how to use their benefits, including:

• Encouraging telemedicine for non-urgent care.

• Teaching employees how to compare costs for medical procedures.

• Promoting preventive care to reduce long-term claims.

2. Provide Access to Healthcare Navigation Services

Some level-funded plans include concierge services that help employees find in-network providers, compare costs, and negotiate medical bills. Employers should actively promote these resources to ensure employees utilize them effectively.

3. Align Plan Design with Cost-Containment Strategies

Employers can structure their level-funded plan to encourage cost savings, such as:

• Offering narrow network PPO options with negotiated lower rates.

• Incentivizing employees to use high-quality, lower-cost facilities for procedures.

• Implementing wellness programs that encourage preventive care and healthier lifestyles.

4. Leverage Carrier Partnerships for Better Insights

Carriers offering level-funded plans provide data insights on claims trends. Employers should work with their brokers and carriers to analyze this data and adjust strategies accordingly, such as adjusting plan design or modifying employee incentives to reduce unnecessary spending.

Is Level-Funding Right for Your Business?

While level-funded plans offer tremendous potential savings, they require active participation from employers and employees to be truly effective. They work best for businesses that are:

• Willing to educate employees on cost-saving healthcare strategies.

• Proactive in managing claims by leveraging carrier tools and analytics.

• Looking for cost predictability with the potential for refunds on unused claim dollars.

For employers struggling with rising healthcare costs, level-funded plans provide a compelling alternative to traditional fully insured options. However, success depends on implementation—a hands-off approach could lead to unexpected costs, negating the benefits.

If you’re considering a level-funded plan for your business, working with an experienced benefits consultant can help you navigate the options, optimize cost-saving strategies, and ensure the plan aligns with your company’s long-term financial and healthcare goals.

The Rising Cost of GLP-1 Drugs: Could They Double the Cost of Healthcare?

diabetes weight loss medication

The growing popularity of GLP-1 receptor agonists—such as Ozempic and Mounjaro for diabetes, and Wegovy and Zepbound for weight management—has sparked both excitement and concern. These drugs, initially designed to treat Type 2 diabetes, have demonstrated remarkable effectiveness in weight loss, leading to a surge in demand. However, the skyrocketing costs of these medications are creating ripple effects across the healthcare system, raising questions about affordability, insurance coverage, and the long-term financial burden on both employer-sponsored and individual health insurance plans, including Medicare.

Could GLP-1s Double Healthcare Costs?

GLP-1 drugs are among the most expensive outpatient prescription medications on the market today, with a monthly cost ranging from $900 to $1,300 per patient. As their popularity grows, insurers, employers, and government programs like Medicare face mounting expenses that could significantly drive up the overall cost of healthcare.

Several estimates suggest that if a sizable percentage of the U.S. population were to use these drugs long-term for weight management, the total spending on GLP-1s alone could rival that of cancer treatments. A report from the Institute for Clinical and Economic Review (ICER) estimates that widespread adoption of these medications could add hundreds of billions of dollars annually to U.S. healthcare spending.

Impact on Employer-Sponsored Health Insurance

Employers, already struggling with rising healthcare premiums, are grappling with how to handle the increasing costs of GLP-1 drugs. Many insurers currently cover Ozempic and Mounjaro for diabetes treatment but deny coverage for Wegovy and Zepbound, which are FDA-approved for obesity. This creates frustration among employees who are unable to access these life-changing drugs unless they have a diabetes diagnosis.

As more employees push for coverage of weight-loss medications, employers must decide whether to absorb the additional cost or pass it on to workers through higher premiums, copays, or deductibles. Some large corporations are beginning to cover weight-loss GLP-1s, but this could lead to higher insurance costs for all employees, including those who do not take the medications.

Impact on Individual and Medicare Insurance

For individuals purchasing their own insurance, GLP-1 drug coverage varies widely by carrier. Medicare, which currently does not cover weight-loss medications, may face increasing pressure to change its stance as obesity treatment becomes a greater public health priority. If Medicare were to begin covering these drugs, it could add billions in new spending, likely leading to higher Medicare Part D premiums or more restrictive eligibility criteria.

At the same time, Medicaid programs in some states have begun covering GLP-1s for weight loss, recognizing obesity as a serious health condition that leads to higher long-term healthcare costs. However, this raises concerns about budget sustainability and whether the federal government will need to step in to negotiate lower prices.

Will Drug Manufacturers Face Pressure to Lower Costs?

As demand for GLP-1 drugs soars, manufacturers like Novo Nordisk (Ozempic, Wegovy) and Eli Lilly (Mounjaro, Zepbound) face growing calls to lower prices. Some key forces driving this pressure include:

  • Government Negotiation: The Biden administration’s Inflation Reduction Act allows Medicare to negotiate drug prices, and GLP-1s could soon be on the list of targeted drugs for cost reductions.
  • Employer Pushback: Large corporations and employer groups are lobbying insurers to demand rebates or lower pricing from drug manufacturers.
  • Patent Expirations & Generic Competition: Once patents expire, generic versions of these drugs will likely emerge at a fraction of the current cost, but this is still several years away.

The Coverage Gap: Diabetes vs. Weight Loss

One of the most frustrating challenges for patients is the inconsistent insurance coverage for GLP-1 drugs.

  • Diabetes GLP-1s (Ozempic, Mounjaro) are covered by most insurance plans, as they are approved for treating Type 2 diabetes.
  • Weight-loss GLP-1s (Wegovy, Zepbound) are often denied because most insurers do not cover weight-loss treatments, despite obesity being a recognized medical condition.

This policy leaves many patients forced to pay out-of-pocket for weight-loss medications or seek loopholes, such as obtaining an off-label prescription for a diabetes drug like Ozempic or Mounjaro.

As obesity treatment becomes a greater focus of national healthcare discussions, insurers may eventually expand coverage, but at what cost? If insurers begin widely covering these drugs, the financial burden could be shifted to higher premiums for everyone.

Looking Ahead: The Future of GLP-1 Drugs in Healthcare

With the growing popularity of GLP-1 drugs, the healthcare system is at a crossroads. Policymakers, insurers, and employers must weigh the benefits of expanding access to these effective medications against the potentially unsustainable costs they introduce.

In the coming years, we may see:

  • More government intervention to control drug pricing and negotiate discounts.
  • Increased employer demand for alternative pricing structures.
  • Potential changes to Medicare and private insurance coverage policies regarding weight-loss medications.

For now, individuals and employers should stay informed on coverage policies, negotiate with insurers, and explore all options for cost-effective access to these groundbreaking treatments.

Reach out to us at CorpStrat to ask how we help employees and companies navigate healthcare.

The Long-Term Care Crisis: Why Planning Today Protects Your Future

 

Woman Helping an Elderly Man in Doing Exercise

The Growing Need for Long-Term Care Planning

Most people don’t think about long-term care (LTC) until they or a loved one need it. By then, options are limited, and costs can be overwhelming. With Americans living longer than ever, the need for long-term care is becoming a reality for more families. Yet, most are unprepared.

Consider this:

  • 7 out of 10 people over age 65 will require long-term care at some point.
  • The average cost of a private room in a nursing home exceeds $100,000 per year, and home health care services can cost thousands per month.
  • Medicare doesn’t cover most long-term care expenses, leaving many individuals to pay out of pocket or rely on Medicaid, which has strict asset limits.

With these staggering statistics, the question isn’t if you’ll need care—it’s whether you’ve planned for it.

The Real Costs of Long-Term Care

Long-term care isn’t just about nursing homes. It includes:

Home Care – Caregivers assisting with daily activities like bathing, dressing, and meal prep.
Assisted Living – Facilities providing personal care, meals, and social activities.
Nursing Homes – Skilled care for individuals with serious health conditions.
Memory Care – Specialized services for those with dementia or Alzheimer’s.

Who pays? Without insurance, individuals must fund their own care, which can drain retirement savings rapidly. Medicaid covers LTC but only after spending down assets.

Long-Term Care Insurance: Is It Right for You?

Long-term care insurance (LTCI) helps cover these costs and preserves financial security. However, it’s not a one-size-fits-all solution. Here are some key considerations:

  • Premium Costs – LTCI premiums vary based on age, health, and coverage choices. Buying early (in your 50s or early 60s) locks in lower rates.
  • Hybrid Policies – These combine life insurance or annuities with LTC benefits, allowing you to use the funds for care or leave a death benefit if unused.
  • State-Sponsored Programs – Some states (like Washington and California) are exploring mandatory LTC tax programs, making private insurance even more attractive.

Long-Term Care Benefits as an Employee Perk

Why More Employers Are Offering LTCI

With the increasing costs of long-term care and a growing awareness of financial planning, employers—especially small businesses—are adding long-term care insurance to their benefits package.

  • Competitive Edge – Employers offering LTCI can stand out in today’s competitive job market, helping attract and retain top talent.
  • Low-Cost, High-Value Benefit – Unlike traditional health insurance, LTCI policies can be offered at little to no direct cost to employers, with employees paying premiums through payroll deductions.
  • Tax Advantages – Businesses may qualify for tax incentives when offering LTCI to employees.

Small Employers Can Now Compete

Historically, long-term care insurance was seen as a benefit only for large corporations. But today, even small businesses can provide this essential coverage through group LTCI policies or voluntary enrollment plans.

  • Employers can negotiate better rates and simplified underwriting, making it easier for employees to qualify.
  • Coverage can be extended to spouses, parents, and even in-laws, making it an attractive family-oriented benefit.
  • With state-mandated LTC programs on the rise, offering private LTC insurance may help employees avoid state-imposed payroll taxes.

For business owners, providing long-term care insurance isn’t just a perk—it’s a way to protect your employees, their families, and your company’s bottom line.

The PERFECT Long Term Care Solution

 So, imagine, if, by implementing ONE strategic product, you could eliminate one of life’s biggest uncertaines, one of life’s biggest What-IF’s?

Enter the PERFECT LTC plan – from CorpStrat. Its pretty amazing. Create a robust pool of care for either individuals, or couples. Can be funded at one-lump sum or over time. Everything about it is guaranteed!

Either one of three things can happen if you act on this:

  • You get sick and use this plan, and it will PAY A MONTHLY BENEFIT to pay for care to you for as long as you (and your spouse) live.
  • You quit this plan along the way, because something better comes along, like a new product or strategy is unveiled, and you recapture most (or all) of your outlay. (NOT an EXPENSE – its an ASSET!)
  • You live a long healthy life and never use or need care, in which case the policy pays a large death benefit to your heirs, tax-free.

No one knows what the future holds, but having a plan ensures that you and your family have choices, dignity, and financial stability when it matters most.

Want to Learn More?

If you’re an individual looking for coverage, or a business owner exploring LTC insurance as an employee benefit, let’s talk!

Did Trump Just Help or Hurt Employer-Based Health Plans?

nurse and doctor discussing with patient

Healthcare in the U.S. remains a hot-button issue, and recent decisions under the Trump administration continue to spark debates, particularly regarding their impact on employer-based health plans. While the administration emphasized flexibility and cost-savings in healthcare, many of its policies raised concerns about long-term stability and access to affordable coverage.

Here’s a breakdown of key developments and their potential impact on employer-based health plans and the broader healthcare landscape:

24 Million Americans Face Medicaid Jeopardy

One of the most significant challenges looming over the healthcare system is the potential loss of Medicaid coverage for millions of Americans. Temporary Medicaid expansions during the pandemic helped many low-income families access critical care. However, with the expiration of pandemic-era protections, 24 million Americans could lose their Medicaid coverage, potentially leading to an increase in uninsured individuals and shifting healthcare costs to employers and hospitals.

For businesses, this could mean more employees seeking coverage through workplace-sponsored plans, potentially straining budgets and increasing premiums. Employers will need to evaluate how these shifts may affect their benefits offerings and their role in supporting employees.

Short-Term and Limited Benefit Health Plans: Help or Harm?

The Trump administration expanded the availability of short-term health plans, which are cheaper and exempt from ACA requirements. While this provides a low-cost alternative for individuals between jobs or ineligible for employer plans, it also comes with significant downsides:

  • Limited Coverage: These plans do not cover essential benefits like mental health, maternity care, or pre-existing conditions.
  • Risk to the ACA Marketplace: By attracting healthier individuals, short-term plans can destabilize ACA-compliant marketplaces, driving up premiums for those who remain.

For employers, these plans may tempt some employees to opt out of comprehensive group coverage, potentially weakening risk pools and increasing costs for those who remain in employer-sponsored plans.

Impact on Public Health Infrastructure

Withdrawal from the WHO

The Trump administration’s decision to withdraw from the World Health Organization (WHO) raised concerns about America’s role in global health. This move could undermine international efforts to address pandemics and public health crises, indirectly affecting the U.S. workforce if future global health challenges are not properly managed.

CDC Policy Changes

Policy shifts and potential closures of certain CDC programs may also weaken the country’s public health infrastructure. Reduced federal support for pandemic preparedness or chronic disease prevention could lead to higher healthcare costs for employers and employees alike.

For businesses, this underscores the importance of offering robust wellness programs and health coverage to mitigate the long-term risks of an overburdened healthcare system.

The Bottom Line for Employers

The Trump administration’s healthcare policies have introduced both opportunities and challenges for employer-based health plans. While short-term health plans and deregulation aim to reduce costs, the risks of destabilizing ACA markets, shrinking Medicaid coverage, and weakening public health infrastructure could lead to increased financial and operational burdens for employers.

What Can Employers Do?

  1. Monitor Medicaid Changes: Be prepared for potential impacts on employee benefits as more individuals may turn to employer plans.
  2. Educate Employees: Help employees understand the risks of short-term health plans and the value of employer-sponsored benefits.
  3. Focus on Wellness: Strengthen workplace wellness initiatives to help employees manage health proactively amid public health uncertainties.

Navigating these shifts requires a proactive approach. Employers must remain informed and flexible to address changes in the healthcare landscape while continuing to support their workforce.

Need help designing a benefits strategy in this uncertain environment? Let’s talk!