AMR Case Study #1
Comprehensive Review and Redesign of
Medical Plan Yields 19% Savings
Situation: A privately owned chemical manufacturing company implemented various health and welfare benefits plans over the course of several years on an “ad-hoc” basis directed primarily by employees. No formal competitive analysis or needs assessment had ever been completed. In addition, limited benefits communication was provided to employees and the company was incurring unnecessary administrative expenses.
Action: AMR completed a comprehensive analysis of the health and welfare benefits plans. This report provided pertinent data relating to the health and welfare plans, including competitive pricing, industry trends and employer funding strategies.
Result: By redesigning the medical plan and offering a dual option, the group was able to save 19% in health plan costs. A dual option medical plan would allow for choice between an HMO or PPO, rather than offering the sole existing PPO. Employee contributions were adjusted to have the HMO set as the primary medical offering with the PPO still available to employees, but requiring a “buy-up” (an additional expense). Enrollment meetings were scheduled to explain the new plan design as well as to review the improved benefits. In addition, the administration of the plan was transferred to an on-line format which considerably reduced the workload for the Human Resources Department. Similarly, it was determined that a significant savings would result if the PPO dental plan was adjusted to offer both a “high” PPO option (richer plan) and a “low” PPO option (more basic plan). Employee contributions were adjusted to have the low PPO option set as the primary dental offering with the high PPO still available to employees, but requiring a “buy up”. It was determined that since the majority of the population utilized only the basic preventative services, this change would produce a significant savings to the company and to employees. Lastly, the Long Term Disability (LTD), Short Term Disability (STD) and Life plan designs were enhanced with higher benefit limits in order to provide proper coverage for employees and the group hired the LTD, STD and Life carrier to administer the dental plan. By bundling these products, the carrier was able to provide on-line services that did not exist prior. The combination of packaging these plans as well as receiving multiple proposals resulted in a 16.3% savings for the non-medical benefits.
Summary:
- 19% Medical Plan Savings
- 16.3% Non-Medical Benefits Savings
- Significant workload decrease for HR Department
- Better LTD, STD and Life plans
Find out how your company can save time and money. Contact Us to schedule your free consultation. There is absolutely no obligation and you will gain a full understanding of your benefits plans options.
