Case Studies – Employee Benefit Solutions
High Technology Company
In a dynamic industry, we helped an evolving company reset its benefits package and continue to attract prized employees.
The problem
A large technology company was reconfiguring its organization, divesting business units and reducing its 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 costs
- stabilizing budget forecasts
- shifting benefit administration tasks to a capable third party.
Our solution
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.
The outcome
A negotiated rate and fees generated savings across all lines of coverage. Extended rate guarantees of up to four years were secured to stabilize the budget process. 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. It also has a financially stable and cost competitive benefit package to attract and enroll new employees with no variable administrative expense.
University
A sharp premium hike left a non-profit looking for help. Our plan saved it millions of dollars.
The problem
A university was facing a 36 percent renewal increase to their long-term disability program. We were engaged to:
- analyze the cost drivers
- determine the validity of the increase proposed
- negotiate the best possible terms.
Our solution
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
- their ability to match existing designs.
The outcome
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 $2.4 million 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 young firm turned to us for a plan to accommodate its rapid employee growth.
The problem
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 four employees but needed to plan to accommodate the hiring of up to 75 within a year.
Our solution
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.
The outcome
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
Our plan to reign-in medical costs changed a trend and allowed expanded benefits for company employees.
The problem
A publicly traded manufacturing company with a high blue collar demographic was experiencing a run-up in medical costs. The group was 60 percent 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.
Our solution
We analyzed the cost drivers and identified three prevalent diagnoses 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 little involvement in large claim management. A competitive bid process was initiated and carriers were analyzed by their:
- financial proposals
- network
- pharmaceutical program
- large case management
- 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 three-tier prescription drug program was introduced.
The outcome
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 percent 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 percent 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.
The administrative burden previously borne by the limited HR staff was reduced.
Physician Group
Through our market experience, members of a small practice found better disability coverage at a lower cost.
The problem
A group of radiologists were concerned that their incomes were exposed if they were to become disabled.
Our solution
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.
The outcome
We negotiated an arrangement with a top ranked carrier that would:
- provide significantly higher monthly maximum income replacement
- increase the guaranteed issue amounts so that all in the practice could participate and benefit from the program
- introduce a more liberal definition of disability that was tailored specifically to their own medical 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.
