Array Bulletin: Service & Market Updates for March 2009
In this issue, we announce exciting news about a recent addition to our Board of Directors. Additionally, we share some
lessons we've learned from working with large clients that have self-funded health plans.
Brian Barefoot, Former CEO of PaineWebber International, Joins Array Health's Board of Directors
We are pleased to announce that Brian Barefoot has joined our Board of Directors. His experiences in finance, operations,
and as a member of the Board of Blue Cross Blue Shield of Massachusetts,
have already helped Array tremendously. We welcome Brian and are excited to have him actively involved in Array's growth.
At PaineWebber, Inc. from 1994 to 2001, Brian served as Executive Vice President and Director of Investment Banking, a member
of its Board of Directors, and President and Chief Executive Officer of its subsidiary, PaineWebber International. Brian
served as president of Babson College, one of the nation's leading management schools, from 2001 until he retired last June.
Brian currently is a Director, member of the Audit Committee, and Chair of the Finance and Business Operations Committee
of Blue Cross Blue Shield of Massachusetts.
Protecting the Claims Experience of Self-Funded Health Plans and Increasing Coverage Rates
Array has recently helped several self-funded companies with large classes of hourly workers. In many cases, self-funded
health plans do not work well for either companies or hourly employees. Array's fixed-cost health benefits plan offers two
powerful value propositions to these companies; it increases employee insurance coverage rates and it protects company claims
experience.
The Problem
Hourly workers are typically paid less than the rest of the employee population and generally struggle to afford the 25
- 50% contribution to their health plans. Participation rates among hourly workers are generally very low. As a result,
hourly workers who elect self-funded health plans are often unhealthy. This can create severe adverse selection issues,
hurting claims experience. Meanwhile those hourly workers who choose not to elect the health plan often remain uninsured.
Solution
The companies Array has assisted have maintained their self-funded health plans for salaried workers and have then offered
Array's fixed-cost health benefits plan to hourly employees. The Array plan is an Health Reimbursement Arrangement (HRA),
which can be used to reimburse employees for medical expenses, including individual health insurance premiums. Array's highly
praised and intuitive web-based platform provides all the essential tools required
for employees to apply for individual medical policies and manage their HRA dollars.
Results
This has been a win-win-win solution for employees, companies, and brokers.
- The percentage of hourly employees with health insurance increases dramatically through Array's service, because employees
can generally find individual policies for less than their companies' contributions.
- The companies are able to fix healthcare costs for their hourly employees, while protecting the claims experience of their
self-funded health plans.
- Brokers keep all carrier commissions, which is approximately 8% for individual insurance. Because far more workers choose
insurance coverage with Array, our brokers end up making more money.
For more information about Array's service, please view our
two-minute video.
Who Pays for Health Care in the U.S.?
In December 2008, the McKinsey Global Institute published a report
entitled Accounting for the Cost of U.S. Health Care: A New Look at Why Americans Spend More. The report provides extensive
analysis of the U.S. health care system in comparison to the health care systems of other countries. It was interesting
to see which organizations and institutions actually pay for the costs of care. In 2006, the U.S. spent $2.1 trillion on
health care. This spending breaks down as follows:
- Public (federal, state, other): $ 996 billion, 49%
- Private (carriers, employers, other): $ 798 billion, 39%
- Consumer Out-of-Pocket: $ 257 billion, 13%
Sincerely,
Christopher Moneta
Director of Sales
1-800-640-7086
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