ELAP Services, a healthcare agency based in Wayne, Pennsylvania, and a developer of an alternative to traditional health insurance, allows self-insured employers and their employees to take back control of their healthcare costs. Since its inception in 2007, ELAP offers a total health plan solution that combines reference-based pricing, concierge-level member support, and flexible administration services, reducing client healthcare costs by as much as 30%.
In a recent interview with American Trucker, Steve Kelly, co-founder and chairman of ELAP Services, discussed the latest healthcare trends in the trucking industry and what fleet owners as well as independent truck drivers can do to operate with proper healthcare coverage.
American Trucker: Describe reference-based pricing (RBP) and how this method can benefit fleet owners, as well as independent truck drivers and owner-operators?
Steve Kelly: Reference-based pricing (RBP) is a healthcare model for self-funded employers that bases provider reimbursements on the actual cost it takes to deliver a medical service (or the Medicare reimbursement rate) plus a fair margin. This bottom-up approach to containing healthcare costs is in contrast to traditional PPO plans in which insurers negotiate cost discounts on inflated and variable prices.
Companies that use reference-based pricing can achieve savings of 15 to 30% in the first year alone. Fleet owners and owner-operators can then reinvest those savings into other areas of their business or in their employee benefits package. For instance, they can lower deductibles, increase employee bonuses, and more -- creating a stronger benefits package to help them attract and retain talent.
RBP provides cost benefits for employees, too. Drivers experience reduced out-of-pocket costs and broad access to medical providers and facilities wherever their routes take them. There is no in- or out-of-network.
AT: How does the rising age of the trucking workforce create typically more expensive demands on health care than in other industries?
SK: Trucking is a physically demanding profession that can take a toll on the body over time. Frequent lifting, climbing in and out of trucks, and long periods seated behind the wheel lead to musculoskeletal injuries that require costly attention from orthopedic specialists. Under a traditional PPO health plan, the cost of an inpatient knee or hip replacement would exceed $30,000. But the cost could also vary widely based on the metropolitan area. For instance, between New York City and Des Moines, Iowa, prices vary three-fold. This fluctuation exists within markets as well. In San Antonio, the highest price of a knee replacement is nearly three times higher than the lowest price. For comparison, the average reimbursement for hip or knee replacement on an RBP plan would be on average $16,000.
RBP makes it more affordable to cover these types of procedures and avoid these wild price fluctuations by reimbursing a reasonable and fair amount based on the actual cost of the treatment rather than inflated insurance prices.
AT: What happens when a truck driver gets hurt on the job and needs medical attention? What peace of mind do fleets need before their drivers and assets hit the road?
SK: When a truck driver gets injured on the job, the last thing they should have to worry about is whether or not they can afford to pay for the care they need. Delaying necessary care leads to higher cost, more acute events down the road. A RPB health plan makes healthcare affordable for both individuals and their organization so members won’t delay care when they need it.
For fleet owners, this offers the peace of mind to know that their drivers are always protected on the job, wherever they may be. A healthy driver is a safer and happier driver.
AT: What advice can you provide to help fleet owners keep their insurance costs down while still offering quality health care for their employees, particularly their drivers?
SK: Cutting costs doesn’t have to mean sacrificing on quality or coverage or limiting care options. For example, because RBP doesn’t have in- or out-of-network providers, plan members have a greater selection of top-quality providers to choose from. My advice would be to find a benefits broker that is educated on current healthcare trends and willing to explore alternative solutions with you. Attracting and retaining employees is so important, and offering an affordable and comprehensive medical plan can be the difference maker.
AT: What are some of the biggest missteps you’ve seen fleets make when it comes to providing health insurance for their drivers?
SK: Business owners may be wary of changing their healthcare plan offering. Sticking with the status quo (large traditional insurance carriers) often feels like the safest choice despite the ongoing cost increases for the company and its employees. But it may not be the best or most affordable. In sticking with the status quo, fleet owners risk paying more unnecessarily and losing employees due to high out-of-pocket costs and coverage that comes up short.
Of those fleet owners and companies that do switch to RBP, the ones that take the time to educate their employees and drivers on the new model, how it works, the benefits it provides, and the services available to them (for instance, care navigation and member advocacy support) are the most successful.
AT: When it comes to health insurance, what trends have you seen that could help fleets better recruit and retain employees in the trucking industry?
SK: Across the board, Americans are looking for more flexibility in the products and services they use without sacrificing cost or quality—this includes workplace benefits like healthcare coverage. Reference-based pricing gives employees the flexibility and coverage options they’re looking for by eliminating networks all while keeping costs low.
During a labor shortage, job seekers and employees are more closely evaluating their benefits and seeking more robust offerings. With the savings trucking companies can gain by adopting RBP, owners can reinvest the money into additional employee benefits that will give them an edge over other employers and attract top talent.
