Do you ever feel like you’re paying too much or wasting money on group benefits, but just can’t find the time to deal with it?

For many businesses, day-to-day operations can be overwhelming, leaving little time to think about shopping around.

But think twice before you dismiss a change. By snapping out of their funk and reassessing their benefits, a small business saved $44,000/year!

It started on a day like any other

Sharon, one of the amazing advisors in our Advisor Nation, was out prospecting. She was knocking on doors, talking to businesses about their benefits, and trying to help them see the Blended Benefits light.

She walked into a small plumbing company, met Tiffany at reception, and asked her about their benefits plan. At first, she got a typical answer, “No thanks, we’re too busy.” But before Sharon walked out the door Tiffany pivoted and said, “Wait a minute, we do need to look at our benefits sometime. I think we’re paying too much.”

When Sharon brought the case to us, she said, “Tiffany feels like they’re getting hosed by their current benefits provider. And she’s absolutely right.” We couldn’t have put it better ourselves!

Paying through the nose

Sharon told us she thought the group was overpaying by about $44,000. That’s a lot of money for any organization. Imagine our surprise when Sharon told us there were only 6 people on the benefits plan! They were wasting over $7,000 per person on their benefits!

How they were getting hosed

This company had been with one of the major insurance carriers for a couple of years. They had been happy with their plan, but then things started to spiral out of control.

It started when one employee began claiming a high-cost drug – about $10,000 per year. That’s not huge compared to some drugs, but it’s a significant expense for a small plan. You can guess what happened to their premiums at the next renewal.

Tiffany told Sharon the insurance company gave a typical answer when they presented these skyrocketing rates, “Get the employees to pay for half the plan. That way they’ll have some skin in the game.”

This is a terrible idea, but the company went for it. They kept their plan going in the face of rising rates by asking their team to help foot the bill. Now instead of being part of their compensation, the benefits plan was actually an expense for employees.

Rates go up, but they seldom go down

After a while, the employee with the high drug costs left the company so claims went down again. Lower claims should mean a lower cost for health and dental coverage, right?

Wrong. Several renewals later, the cost of their plan hadn’t gone down, and employees were still paying for half.

It was so bad that employees started leaving the plan. They just couldn’t see the value in it.

Blended Benefits to the rescue

Sharon proposed setting up an HSA Classic for this company. It gives each employee funds they can use for healthcare expenses as they see fit. No plan limitations, no copays, and no impact from other employees’ usage. A Health Spending Account (HSA) also provides cost control for the company. They decide how much to fund and when to increase contributions.

She also helped keep the Peace of Mind benefits they had before – Life, Disability, and Accidental Death and Dismemberment insurance. Our partners sharpened their pencils to match the current coverage with even better rates.

Sounds like Sharon had a winner when she went in to present this proposal.

What is your time worth?

When Sharon presented switching to an HSA to replace their current health and dental coverage, Tiffany and her colleagues had one major concern – simplicity.

They weren’t used to a reimbursement model. Their team expected to have direct payments to providers and a drug card to use at pharmacies. Would training the team and requiring employees to submit claims for reimbursement cause HR headaches?

Those were valid concerns, but they evaporated as soon as the owners saw the potential savings. $44,000 was definitely worth a little time educating the team about how to submit HSA claims!

That’s a big lesson for many business owners. Insurance company coverage has so many hidden costs and fees that you often end up paying $2 for every $1 in claims. Is having a drug card instead of spending a few minutes submitting claims online really worth it?

Finally, a happy renewal

When their Blended Benefits were renewed Sharon and Tiffany got two nice surprises:

• They were in control of their costs; and
• Their Peace of Mind rates went down!

At renewal, the company elected to increase an HSA contribution for one class of employees. Isn’t it great when you can make these decisions yourself instead of being at the mercy of an insurance company’s rates and plan choices?

Stop snoozing on improving your benefits

Have you been hitting snooze at renewal and letting the insurance company dictate your plan instead of paying attention to your company’s group benefits?

Take a lesson from this story and quit getting hosed! Spend a little time reviewing your benefits plan this year so you can get back in control and save money for years to come.

Our Growth Team loves sharing stories like this and can’t wait to help write yours. Give us a shout to start the conversation.