The Challenge: "Our employees are young and healthy, and prescription drug benefits are a waste of money for our population."
The client was looking for a way to be a better health care consumer. They had an average age of 32 with very low medical plan utilization. BSP’s customized reporting showed that the client consistently paid much more in premium than their employees ever used in benefits. They were uncomfortable with the idea of converting to a self funded medical plan. The client’s goal was to use their existing healthcare dollars effectively and efficiently; saving money was a secondary consideration.
The Solution: Carve out the prescription drug benefit and self fund this coverage while retaining a fully insured base medical plan.
BSP negotiated a very effective base rate from the medical plan, and found a pharmacy benefit manager (PBM) to take over the drug portion. The client customized their drug plan, saving hundreds of thousands of dollars as a result of paying for only the claims they incurred vs. the premium for potential drug utilization, by employing a customized formulary targeted to the client’s population, and through participation in a drug rebate program from the pharmacy manufacturers.
The Bottom Line Result: After more than eight years of successfully self funding their drug benefit, this client’s costs are over 20% less than comparable organizations nationally (based on published survey data). Estimated savings: 20% of one year of health care is $952,027, not including rebates. Multiplied by 8 years, the savings are very compelling.
The Challenge: A Costly LTD Premium
The client is a multi-site company in the retail industry. They had a Disability plan that paid up to $15,000 per month in income replacement benefits. They were concerned about optimizing their benefits dollars, but preferred not to reduce benefits. BSP did an income replacement ratio analysis, and concluded that there were only three employees who would be impacted by an LTD benefit reduction.
The Solution: Lower the LTD Max, and use some of the savings to pay for individual disability for the impacted employees.
The solution for this client involved a reduced LTD benefit that in fact held benefits at the same level for almost everyone, but saved $22,000 in premium per year for a three year contract. The three impacted people were provided with individual LTD policies that are non-cancellable, and guaranteed renewable. The cost of the 3 policies was less than one year of savings.
The Bottom Line Result: $54,000 in savings with neutral benefits for all but three employees, who received the same level of coverage through a portable policy.
The Challenge: Employees wanted more
LTD CoverageThe client is a Not for Profit with a relatively low LTD income replacement benefit. Employees were concerned about not having sufficient coverage. The client asked BSP to get a proposal for a Supplemental LTD Benefit. This Supplemental Benefit was intended to be offered in addition to their current employee paid Supplemental Plan.
We did an analysis of the cost and benefits of the group plan and the supplemental plan, and concluded that we could provide the most meaningful coverage at the best cost by increasing the employer paid LTD benefit.
The Solution: renegotiate the cost and benefits of the current LTD plan.
BSP renegotiated the LTD rates and benefits. The impact of the change is that we significantly reduced the number of people who would want or need supplemental coverage. The cost to the employer was neutral with no reduction in benefits, and the savings to the several hundred employees was enormous.
The Bottom Line Result: No cost increase to the employer, incalculable value in the form of goodwill from employees, both for the benefit enhancement, and the significant savings in their out-of-pocket costs.