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Company Size:
61 Benefit Eligible Employee
Employee Locations:
Major concentration in their home office with 35% of the workforce located in other States.
Scenario:
Employer currently has Medical, Dental, Life and AD&D with one major insurance carrier in the State. There are three medical options offered- HMO, In-State PPO, Out-Of-State PPO.
Current carrier provides a 2% discount to the medical rates for keeping the Dental and Life Plans with them.
Findings:
Market analysis indicated that the employer was paying 35% above the market for their Dental and Life plan. Unbundling these from the medical resulted in an increase in the benefits and annual savings of over $24,000 per year. The 2% penalty the carrier added to the medical plan amounted to approximately $7,000 per year resulting in a net savings of $17,000 to the employer.
Plan Improvements:
Life and AD&D- increased from a flat $15,000 per employee under the current plan to One Times Salary to a Maximum of $50,000
Dental- Same benefit design with minor plan enhancements. Customer service issues were addressed and rectified.
Employee Communication Portal- was setup to provide easy access for employees to their benefits information and as a communication channel.
Summary:
These were not low-ball rates. Seven major carriers were all within a few percentage points of each other which were all 30% to 38% below the in-force rates. In-force rates, not their renewal rates!