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This article was originally published by Sophia Lee at https://partners.amino.com/resources/blog/usi-topher-bates-on-cost-shifting-and-benefits-innovation/

Sophia is on the communications team at Amino, where she helps share industry perspectives.

Topher is a Vice President at USI Insurance Services, where he specializes in designing innovative solutions for his clients. In addition to his role at the firm, Topher is an active thought leader in the benefits space, sharing weekly insights about the industry in his #TopherTuesday series on LinkedIn.

In this Q&A, we hear Topher’s explanation of the difference between cost shifting and cost containment, and how he plans to contribute to the diversification of the future insurance workforce.

Can you tell us more about your company and role?
USI is a privately held, full encompassing, insurance brokerage and consulting firm. My responsibility is to work closely with C-level executives at middle market organizations, specifically helping them cut healthcare costs while improving their employee benefits program.

What’s one thing you wish everyone knew about your job?
I wish everyone recognized that employee benefits are a vital part of the American dream and often are an organization’s second largest expense. Even so, access to affordable and quality healthcare remains a challenge nationwide.

Learning how to be a better consumer of healthcare and insurance can have a direct impact on your mind, body, business and pocket book. At the end of the day, health = wealth. It’s important to ask your employer or insurance broker what resources are available for your continued education.

What recent news or trend has you most excited about the healthcare benefits space, and why?
According to the U.S. Bureau of Labor Statistics, over 400,000 people (15% of the workforce) are expected to retire from the insurance industry by 2025. Further research indicates that less than 4% of millennials are attracted to careers in insurance.

While succession planning presents a tremendous challenge for industry leaders, I believe it creates a wonderful opening for the marketplace to embrace diversity and encourage innovation. I look forward to training and developing diverse future leaders that will prioritize transparency and promote technology when solving complex problems for customers.

I look forward to training and developing diverse future leaders that will prioritize transparency and promote technology when solving complex problems for customers.

Further, with the rapid rate of advancements in medicine, the national pharmacy spend crisis is one area of focus that especially needs change as we plan for the future of healthcare and benefits.

What’s a common “myth” in the healthcare benefits space that you’d like to debunk?

Many employers believe that rates provided at renewal time determine the value of their broker partnership. In actuality, evaluating the effectiveness of a broker/consultant should not be limited to a one-time annual event or transaction.

Although health insurance is not considered a “sexy” topic of discussion, medical debt is the number one reason Americans file for bankruptcy. Any organization offering employee benefits should annually uncover what they’re paying for and how it impacts their employees. While keeping insurance on auto-pilot is easy and perceivably prevents disruption, I challenge employers to prioritize a financially transparent, ongoing relationship with their broker/consultant.

A lot of people seem to confuse “cost reduction” with “cost shifting.” Can you clarify the difference for our readers?
Cost reduction is the result of finding efficiencies in a health insurance plan that produces organizational savings on annual spend. Contrarily, cost shifting is the practice of the changing employer vs. employee contributions in the health insurance plan. In theory, some leaders believe shifting costs or spreading financial responsibility encourages employees to make different choices that result in lower costs. However, cost shifting does not necessarily produce cost reduction; and cost reduction can occur without shifting costs.


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It was a pleasure to recently represent USI Insurance Services in partnership with the Illinois Network of Charter Schools at the 2018 INCS Conference. This was a special moment as I had the distinct privilege to award two 8th grade students and 4 seniors for their outstanding scholarship and strong leadership. There are approximately 63,950 students in charter schools in Illinois today. So, as you can imagine, this is a very competitive award, and INCS received more nominations than ever last year. The awardees needed to demonstrate more than academic achievement and leadership, they also needed to show:

• an embodiment of their school’s mission, and
• exceptional involvement in their school and community.

Congrats to Alain Locke Charter School, KIPP Chicago, Horizon Science Academy McKinley Park, Intrinsic Schools, Noble Network of Charter Schools and Southland College Preparatory!
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Exciting News… If it’s your mission to bring unmatched service and expertise to the development of Illinois charter schools we can help. #charterschools #educationreform

USI Insurance Services is proud to serve as the endorsed insurance brokerage and employee benefits consulting provider for the Illinois Network of Charter Schools (INCS). Together, INCS and USI will partner to bring innovative risk management and human capital expertise to the more than 142 charter public schools across the state of Illinois. Read more: https://bit.ly/2Prxj1C
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TopherTuesdays is a video blog dedicated to empowering others through insurance education. In addition, we share world class interviews exploring personal and professional development, health, fitness, entrepreneurship and education.
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Most people would jump at a 7% to 12% reduction in costs for the same product or service. But when that strategy is a partially self-funded medical plan, employers hesitate concerned about their maximum claims liability.

Despite perceived risks – converting from a fully insured to a level or partially self-funded arrangement can be the first step in aggressively managing your overall health care spend. While fully-funded insurance plans are less volatile, the self-funding model is ideal for accessing relevant data and information that can be used to make informed and intelligent cost management decisions.

For organizations with 100 employees or more typical net savings include:

  • 2.5% of premium for avoiding taxes (depending on state)
  • 5.0% of premium avoidance of carrier margin (profit)
  • 2.5% avoidance of ACA pass through taxes (in 2014 and later)
Currently, more than 90 million employees get health insurance through self-funded plans as employers realize the cost savings, plan flexibility and employee satisfaction that can manifest as earlier as one year after implementation. A self-funded insurance plan can include medical, dental, vision, prescription medications and workers’ compensation. #TopherTuesdays
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You pour your heart into your career. The future is bright and you plan to grow at your company. Suddenly, things change when your spouse is diagnosed with a terminal illness. Family is the top priority but you fear losing your job and “organizational favor” if you take time off.


Fortunately under the Family and Medical Leave Act (FMLA), eligible employees may take up to 12 weeks of unpaid leave from their covered employer to take care of a close family member who has a serious health condition, for the birth or adoption of a child, or for the employee’s own emergency medical care. FMLA also requires that group health benefits be maintained for the employee during their job-protected leave.


It is unlawful for any employer to interfere with, restrain, or deny the exercise of any right provided by the FMLA. Additionally, it’s unlawful for an employer to retaliate or discriminate against any individual who has used Family & Medical Leave.


Employers generally find the FMLA simpler on its face than it actually is in practice. In reality, a large number of organizations are unwittingly not in compliance with the FMLA. Check with your manager or Human Resources department for your company’s policies on other forms of leave.
#TopherTuesdays
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It was a distinct honor and privilege to host a small group of exceptional young men from Urban Prep Academies at USI Insurance Services for their 12th annual Discovering Our City event.

#DiscoveringOurCity is Urban Prep’s annual all-school field trip that exposes high school students—many of whom have never been out of their south and west side neighborhoods—to the professional, civic, and cultural institutions that make Chicago great.

 

 Urban Prep Academies operates a network of charter public high schools for boys in high need Chicago communities. 100% of Urban Prep’s graduates—all African-American males, mostly from low-income families—have been admitted to college.

 

Most important message of the day – “Believe in yourself!”

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More than likely, your fastest growing household or business expense is the cost of prescription drugs.

In my first video blog, I sat with Mark Haye to briefly discuss the national pharmacy spend crisis.

A few takeaways:
1. High cost drugs are driving up overall healthcare spending
2. Employers should examine their pharmacy benefit contract agreements to uncover rebates and commissions that may create misaligned incentives
3. Educate yourself on therapeutically similar alternatives that are less expensive to meet your pharmacy needs

Stay tuned for new and improved content dedicated to empowering others through insurance and healthcare education. #TopherTuesdays

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This week marked my 4th year working with Frank Edgeworth’s class as an EPIC Intensives Partner!

EPIC Academy College Prep, a CPS Level 1 public, enrollment charter high school, has served low-income African American and Latino students in the South Chicago community since 2009.

The South Chicago community, one of Chicago’s poorest neighborhoods, has a 20% unemployment rate and a childhood poverty rate that is 86% higher than all other U.S. neighborhoods.

Every semester, EPIC Academy partners with corporations and professionals in Chicago to help students realize how hard work in the classroom translates into career success.

Through the EPIC Intensives program, students are introduced to careers they might not have considered, while being challenged to model the critical thinking, communication and professional skills that are vital to achievement in the workplace.

My favorite part of being an EPIC Intensives Partner is seeing students empowered when they discover that anything is possible with the right exposures, mindset and planning. Further, I believe every student, regardless of their zip code, deserves access to the skills and network necessary to help make their dreams come true.
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