A Healthcare “Captive” A recap of healthcare funding strategies presentation By Vanessa Salvia BUSINESS OPERATIONS Recently, ARPM held its 2024 Finance Forum for members, which included a presentation on healthcare funding strategies. Attendees were exposed to the concepts for funding healthcare, the most common funding options and how they differ, as well as the process for transition and how the transition can be beneficial through transparency and financial control. STATE OF THE MARKET Healthcare costs continue to rise annually at rates that are unsustainable for most businesses offering employee benefits. Over the last decade, employers have seen coverages rise between 5% and 7% per year due to inflation, prescription drug price hikes, and increased expenditures. This is particularly true in the small- to mid-sized market, where yearly costs have increased anywhere from 10% to 12%. Some employers have reported double-digit renewal increases as high as 45%. Healthcare is continually one of the top three largest expenses for any business. And despite this peak expense, many business owners don’t have a strategy for handling the costs and the annual increases that occur. Some might have a broker or consultant who can assist with the renewal process, although sometimes the employer has to trust that the broker is competent enough to make the best decision for the company versus the broker’s livelihood. When costs aren’t manageable, employers typically either switch carriers or start to dilute coverage, both of which significantly affect 59% of manufacturers cite rising healthcare costs as a significant challenge. 16 / INSIDE RUBBER / 2025 Issue 1
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