The employer had 5,054 employees, the parent company had over 20,000. The fear was that the change would bring about a very significant cost increase resulting from a high ratio of Large Loss Claims against their now smaller claim pool.
The client was looking for an innovative way to reduce costs without compromising their employee health insurance benefits.
We assisted with identifying a new plan administrator with some very strong creative solutions for catastrophic claim prevention. In addition to several recommendations for reducing catastrophic claims going forward, we worked with the client to restructure their health plan model to (a) consolidate options by eliminating plans with low participation, (b) design plan structures that would be more desirable for the at risk workforce, and (c) create a lower cost creative concept plan that would meet the needs of the majority, while reducing costs for both the employer and employees alike.
By transitioning 2,660 employees and their dependents to a $6,000 deductible major medical plan and placing $4,500 in deductible wrap insurance, we saved the employees $1.4M per year in medical plan premiums. Likewise, the employer’s funding expenses were reduced by approximately $4.6M per year.
This initiative has proven very successful for the client and was a tremendous asset to helping them meet their overall budget objectives.