High Technology Company
A large technology company was reconfiguring its organization, divesting business units and reducing labor force. The reduction also affected the benefits support staff, significantly increasing the workload among the remaining personnel. The issues we focused on included reducing benefit cost, stabilizing budget forecasts and shifting benefit administration tasks to a capable third party. We provided a benchmarking analysis to align the re-configured company with fewer employees to same size peers in the industry and region. We conducted a competitive bidding process to identify carriers who could provide competitive pricing and support and we identified processes that could be outsourced reliably and cost effectively. After a thorough due diligence process, carriers were chosen. Negotiated rate and fees generated savings across all lines of coverage, extended rate guarantees of up to 4 years were secured to stabilize the budget process and all life insurance enrollment and recordkeeping was outsourced to a third party at no additional cost. The company has conducted a full turnaround in its business and has a financially stable and cost competitive benefit package to attract and enroll new employees with no variable administrative expense.
University
A University was facing a 36% renewal increase to their Long Term Disability program. We were engaged to analyze the cost drivers, determine the validity of the increase proposed and negotiate the best possible terms. After a thorough review of the open and closed claims, incurred reserves and forward projection, we determined that the increase was based upon assumptions that were far too conservative. We also reviewed the plan design and identified changes that could be made to reduce the renewal increase. The client was not interested in plan design changes that would lessen the benefit which made the determination to market the program the obvious course of action. A competitive bid process was conducted and finalist carriers identified based upon financial competitiveness, their ability to provide quality service to claimants and to the university, and their ability to match existing designs. After a thorough due diligence process of analyzing financials, comparing LTD contract provisions and negotiating the best possible arrangement for the client, a new carrier was awarded the business. The university saved approximately $2.4m of LTD premium over three years, obtained short term disability advice and management services for complex claims at no additional cost, and benefited from enhanced customer service capabilities available to the HR office and to their employees.
Start-up Company
A CFO of a large client moved to a small start up company and needed assistance to design and implement a brand new employee benefit plan. The company was starting with 4 employees but needed to plan to accommodate the hiring of up to 75 within a year. We provided benchmarking data to assist with the plan design development process, obtained competitive pricing from numerous carriers, presented the results and recommendation. The company accepted our recommendation and our ongoing services to monitor their growth to help them manage costs and make adjustments on a periodic basis. Our technology support was offered to assist with the enrollment and centralize benefit information. Our involvement allowed the CFO to focus on growing his business knowing that he could rely upon us to develop a competitive benefit infrastructure, manage costs and alleviate the administrative burden. The company continues to grow and succeed.
Manufacturing Company
A publicly traded manufacturing company with a high blue collar demographic was experiencing a run-up in medical costs. The group was 60% male with an average age of 48. Historically, cost shifting to employees had been employed to offset the rising cost as it affected the employer and its thin profit margins. We analyzed the cost drivers and identified 3 prevalent diagnosis’ that were driving the claims: heart issues, cancer and back pain. Obesity and poor health habits were a common denominator for claimants. The plan was with a TPA who had very reasonable administrative pricing but as far as we could tell little involvement in large claim management. A competitive bid process was initiated and carriers analyzed by their financial proposals, network, pharmaceutical program, large case management and wellness services. After a series of negotiations, a carrier was chosen. The funding was changed from self-insured to insured to limit the large claim exposure and provide a fixed budget. In addition, a suite of claim management tools were introduced to intervene in large claims and provide more proactive identification of employees at risk. A new 3 tier prescription drug program was introduced. The plan was rolled out through a major communication effort which not only described the plan benefits, but also raised awareness of overall costs and individual responsibility. The first year insured costs were 8% below the anticipated self insured costs and the first renewal was half the rate of trend. The cost savings allowed the company to introduce a dental plan for the first time and contribute 75% of the premium. Our web site hosting service was employed to create a unique intranet for the company for employees to access information about all their benefits including the retirement plan and vacation schedules, which reduced an administrative burden previously borne by the limited HR staff.
Physician Group
A group of radiologists were concerned that their incomes were exposed if they were to become disabled. A review of their group practice and specialties was conducted in order to determine the extent of the income exposure and recommend solutions. An audit of individual policies was initiated and a group disability bid conducted. A strategy was developed which would allow the practice - and each physician - to obtain better coverage at a more competitive cost than they were currently paying. Specifically, we negotiated an arrangement with a top ranked carrier that provided significantly higher monthly maximum income replacement, increased the guaranteed issue amounts so that all in the practice could participate and benefit from the program, and introduced a more liberal definition of disability that was tailored not only to the practice of medicine but very specifically to their own specialty differentiating between those who performed invasive vs. diagnostic radiology. The group program was offered at a cost of coverage significantly less than that available on the individual market.