What Fully Insured Plans Hide From You
Here's how a typical fully insured renewal conversation goes:
Carrier: "Your renewal is up 12% for next year."
You: "Why?"
Carrier: "Claims were higher than expected."
You: "Which claims? What drove the increase?"
Carrier: "We can't share that level of detail. Privacy concerns. But claims were up across the board."
End of conversation.
You get a premium. Maybe a loss ratio (total claims divided by total premium). If you're lucky, you get broad categories: medical vs. pharmacy, inpatient vs. outpatient.
Here's what you don't get:
How many employees are driving the majority of costs
Which conditions are creating the highest claims (anonymized, aggregate data)
Whether utilization is increasing or just unit costs
Which providers or facilities your employees are using
What percentage of costs are preventable
Whether your plan design is actually working
Pharmacy trends by drug class or therapeutic category
The carrier has all of this data. You don't.
Why? Because if you had this data, you'd realize where the inefficiencies are. You'd ask uncomfortable questions. You'd demand changes.
You might realize you're overpaying.
What Level-Funding Reveals
With level-funding, you receive detailed monthly claims reports.
Not summaries. Not loss ratios. Actual data.
Here's what shows up in your monthly report:
Claims by Category:
- Inpatient hospital: $45,200
- Outpatient surgery: $28,900
- Emergency room: $12,400
- Primary care: $8,600
- Specialist visits: $15,700
- Diagnostics: $9,200
- Pharmacy: $38,100
Top Cost Drivers (Anonymized):
- Member 1: $18,400 (oncology)
- Member 2: $14,200 (orthopedic surgery)
- Member 3: $12,800 (maternity)
- Member 4: $9,600 (diabetes management)
- Member 5: $8,900 (cardiology)
Utilization Trends:
- ER visits: Up 15% vs. last quarter
- Preventive care: Down 8%
- Generic fill rate: 78% (industry benchmark: 85%)
- Telemedicine usage: 12% (potential to increase)
Provider Analysis:
- Hospital A: 45% of inpatient costs (high-cost facility)
- Urgent care: underutilized (could reduce ER visits)
- Specialty pharmacy: $22,000 (opportunity for review)
You can actually see where the money is going.
And more importantly, you can do something about it.
How to Use Transparency For Cost Control
Data without action is just expensive reporting.
Here's how Columbus employers are using level-funding transparency to control costs:
REAL EXAMPLE 1: Emergency Room Overutilization
What the data showed: Monthly reports revealed ER visits up 23% year-over-year. Average ER claim: $1,800.
The investigation: Most ER visits were happening after-hours for non-emergency conditions (sinus infections, minor injuries, stomach issues).
The solution: Implemented 24/7 telemedicine benefit. Promoted urgent care locations with evening/weekend hours. Communicated ER cost differential to employees.
The result: ER visits down 35% in six months. Telemedicine usage up 40%. Savings: $48,000 annually.
Without claims data: They would never have known this was happening.
REAL EXAMPLE 2: Generic Medication Conversion
What the data showed: Generic fill rate: 72% (industry benchmark: 85%). Pharmacy costs 18% higher than expected.
The investigation: Significant percentage of employees on brand-name medications with generic equivalents available.
The solution: Pharmacist outreach program. Physician education on generic alternatives. Enhanced generic incentives (lower copays).
The result: Generic fill rate increased to 84% over 12 months. Pharmacy costs down 12%. Savings: $64,000 annually.
Without claims data: They would have accepted 18% higher pharmacy costs as "just how it is."
REAL EXAMPLE 3: High-Cost Facility Steering
What the data showed: One hospital system represented 60% of inpatient costs despite being the most expensive option in the market.
The investigation: Employees defaulting to "closest hospital" without understanding cost differences. Same procedures costing 40-60% more than other in-network facilities.
The solution: Transparency tool showing employees cost differences before procedures. Incentives for using lower-cost, high-quality facilities. Direct communication about cost variation.
The result: Hospital utilization shifted 25% to lower-cost facilities. Same quality outcomes. Savings: $92,000 annually.
Without claims data: They would never have known where employees were receiving care or that lower-cost options existed.
The Questions Transparency Lets You Ask
When you have claims data, you can ask questions your fully insured plan prevents:
About Utilization:
- Why are ER visits increasing?
- Are employees using preventive care?
- Is telemedicine adoption growing?
- Which employees need care management support?
About Costs:
- Which conditions drive the most spend?
- Are we using high-cost or low-cost providers?
- Where are pharmacy costs coming from?
- What's our generic vs. brand mix?
About Plan Design:
- Is our deductible creating barriers to care?
- Are copays appropriately structured?
- Should we add or remove benefits?
- Is our plan competitive for recruitment?
About Outcomes:
- Are chronic conditions being managed effectively?
- Are preventive screenings happening?
- What's our readmission rate?
- Are high-cost claimants getting case management?
These aren't theoretical questions.
They're questions that lead to $50K-$150K in annual savings for mid-size employers.
But you can't answer them on a fully insured plan because you don't have the data.
What about Privacy?
The immediate concern: "Isn't this a HIPAA violation?"
No.
Claims reports are:
- Aggregated (no individual identification)
- Anonymized (Member 1, Member 2, not names)
- Protected (only accessible to authorized plan administrators)
- Compliant (designed specifically for ERISA plan sponsors)
You're the plan sponsor. This is your plan. You have a legal right to this data.
Carriers don't give it to you on fully insured plans because they're not required to, and it's not in their interest to do so.
But it's absolutely in your interest to have it.
The Real Value of Transparency
Here's what we tell CFOs:
The 15-25% cost savings from level-funding is Year 1 value.
The transparency advantage is Year 2-10 value.
Because once you can see where money is going, you can:
Identify waste and eliminate it Implement targeted interventions Make data-driven plan design changes Negotiate better vendor contracts Improve employee health outcomes Control costs proactively instead of reactively
This isn't possible on fully insured plans.
You get a renewal. You get a premium increase. You make a binary decision: accept it or shop the market.
That's not cost management. That's cost acceptance.
What This Looks Like in Practice
Columbus technology company, 120 employees:
Year 1 on level-funding: Saved $220,000 vs. previous fully insured premium (18% reduction)
Years 2-3 using claims data:
- Identified high ER utilization → implemented telemedicine → saved $35K
- Found low generic fill rate → pharmacist intervention → saved $52K
- Discovered high-cost imaging facility preference → employee communication → saved $28K
- Noticed increasing diabetes claims → wellness program focus → improved outcomes, saved $41K
Total Year 2-3 savings from transparency: $156,000
Without claims data: They would have saved $220K in Year 1, then watched costs creep back up in Years 2-3 without knowing why or how to stop it.
With claims data: They saved $220K in Year 1, then found another $156K in Years 2-3 through targeted interventions.
That's the transparency advantage.
The Questions to Ask Your Broker
If you're currently on a fully insured plan, ask your broker:
"Can I get monthly claims reports showing where our costs are coming from?"
They'll say: "Not on a fully insured plan. The carrier owns that data."
"What if we moved to level-funding?"
They should say: "Yes, you'd receive detailed monthly reports showing claims by category, utilization trends, cost drivers, and opportunities for intervention."
If they don't say that, or if they've never mentioned level-funding as an option, you need to ask why.
Because the transparency advantage alone is worth exploring alternative funding.
Level-funding isn't just about cost savings.
It's about taking control.
Control over your costs. Control over your data. Control over your decisions.
Fully insured plans keep you in the dark by design.
Carriers profit from information asymmetry. They know everything about your plan. You know almost nothing.
Level-funding changes that equation.
You see the data. You understand the trends. You make informed decisions. You control costs proactively.
The question isn't "Can we save money with level-funding?"
The question is: "What are we missing by not having our own claims data?"
And the answer is: more than you think.
