The rise of reference-based pricing for health plans, especially among employers smaller than those that have traditionally employed this strategy, could be giving some insurance companies a bit of an identity crisis.

This option for employers limits costs by providing a fixed amount for certain healthcare services and negotiating directly with providers, usually through a third-party administrator.

Why would an employer want to do this?

Reference-based pricing side steps the insurance network, the principle point of value for most group insurance companies. If reference-based pricing diminishes the value of carrier networks, insurance companies will need to provide value in other ways.

CU Benefits Alliance is poised to help credit unions with this trend. By integrating reference-based pricing strategies into our value proposition, we can help certain credit union employers gain more control over their healthcare costs.

This means helping interested employers to go partially self-insured, which many may balk at. But, through quality plan design and effective messaging, CU Benefits can help lead the industry to a lower cost, more rational environment.