A Solution with Healthy Savings
In a joint venture, two large international employers established an independent stand-alone third entity with its own set of benefit plan designs.
Contractual provisions dictated that benefit comparability be preserved, so the original benefit consultant only approached the vendors that had been administering one of the original employers' benefit plans. Subsequently, we were brought into the situation to analyze the benefits and financial arrangements.
Our initial approach was based on the broad concepts outlined below. We:
- Reviewed the overall plan offerings to determine if there was an adequate array of coverage and benefit options to meet employee needs
- Analyzed the current funding arrangements of the various benefit plans to determine if existing fully insured arrangements made financial sense, given the size of the employer
- Considered the current specific vendors to determine if they were appropriate and cost effective given locations of employees, plan designs offered and financial objectives of the employer
- Audited all "Plan" and associated legal documents to establish the employer's legal compliance
After an initial review of plans and costs, we determined that marketing all lines of coverage was appropriate. The marketing analysis suggested that a change in carriers was needed for all benefits. We also moved the medical, prescription drugs and dental plans to self-insured arrangements. Lastly, overall "Wrap Plan" documents were established with the needed HIPAA adoption documents, policies and procedures, along with the needed training to properly address plan and company legal compliance requirements. "Plan" documents and plan designs were later updated in connection with PPACA requirements.
The review, marketing analysis and legal compliance documentation implementation yielded the following.
- By marketing all of the plans along with moving the medical, prescription drugs and dental plans to a self-insured arrangement, we were able to reduce the employer's benefit plan costs by approximately 18%
- The employees were provided updated plan options at industry competitive contribution levels
- We brought the employer into legal compliance relative to HIPAA, PPACA and all legal notices
- We provided the benefit manager with additional benefit plan knowledge and the security of knowing that their benefit program was competitive and met all legal requirements
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