Gary and his family own a pet food and accessory distribution company. They have a team of about 100 people who they believe in supporting with a strong group benefits plan.
For years they had watched as health and dental insurance costs steadily rose and ate into their profits. Dental costs in particular were getting out of hand. In recent years they had tried cost-sharing with their employees in order to keep up with the rising cost of their benefits.
They needed a solution that provided cost control.
The challenge? Their insurance company held all the cards. They dictated the premiums at each renewal. Gary and his team had to make tough decisions about how to allocate more money to their benefits plan, cut back their benefits, or ask their employees to share more of the cost.
Something had to change if Gary and his family wanted to continue to look after their team. They heard that Blendable was flexible and asked us to build a custom program for them.
We sat down with Gary and his team to discuss their goals for the benefits plan. They wanted to:
- Continue providing Peace of Mind coverage with Life, Accidental Death & Dismemberment, Short Term Disability, and Long Term Disability insurance;
- Continue with the same health benefits they were offering; and
- Find a way to limit dental costs without paying extra for stop loss insurance.
So, what did we come up with?
Our insurance partners sharpened their pencils
Their Peace of Mind rates were all reasonable already, but with our bulk buying power and insurance partners we were able to source better rates and more stable Long Term Disability insurance.
We created cost control
We set up an Enhanced Health Blend (EHB) that mirrored their current insured health benefits so members would have coverage they were familiar with. Limits, maximums, and copays were all designed to provide coverage the members expected, while controlling the company’s costs.
An Enhanced Health Blend is a way of self-insuring your health costs. We help design coverage amounts, maximums, and limitations just like an insured health plan, but instead of paying premiums, the organization pays the claims directly. This can save money in the long run.
We gave them a new way to pay for dental care
Since dental costs were a major concern, we recommended removing dental coverage from the EHB so they wouldn’t be surprised with large claims. Instead, we set up a Health Spending Account (HSA) which plan members could use for any eligible medical expenses – including dental care and orthodontics.
An HSA gives a team total flexibility and the most cost control. Plan members can use the funds for any eligible medical expense. Plan sponsors choose how much to contribute to the HSA. No plan limitations or surprises!
But did it work?
Based on the plan design, the company set up a contingent reserve on their balance sheet to cover a reasonable maximum liability. This was more cost-effective than paying stop loss premiums and gave them a safety net in case claims were extraordinarily high one year.
However, they haven’t dipped into the reserve account in 8 years, even after expanding their health coverage over time!
And employees have never been asked to increase their portion of the cost-sharing.
Get your benefits costs under control
Is your company facing similar challenges to Gary and his team? If you want to support your employees with amazing benefits, and you aren’t willing to write a blank cheque to an insurance company, get in touch!
The Blendable Growth Team is here to help identify your challenges, set goals for your benefits plan, then build group benefits that are right for you. We’ll bend over backwards to get it right!
