Case Study 1

The Organization
A large manufacturing firm with locations in rural areas from the south to the Midwest comprised of 31% union employees, 47% non-union employees and 22% retirees. The average age is 47.8 years old. Of the company, 76% male and 40% of the contracts are in the family tier. For over 15 years, the company has contributed 95% toward each employee's monthly premium among all tiers. Employees had little understanding of their benefits and the healthcare environment and were not acting as enlightened consumers of healthcare.

The Challenge
Bell Associates was given six weeks prior to the existing policy's renewal date to review the medical plan and ancillary products: identify potential savings, determine whether benefits were properly constructed and update the company's coverage within the union bargaining agreement without substantially altering benefits and contributions.

The Solution
In order to identify cost savings, increase coverage and maintain benefit levels, Bell Associates worked with the senior management team to determine the company's risk tolerance. The team of Bell Associates determined the stop loss was considerably lower than necessary and increased to a level appropriate for a group of this size - changing the stop loss was the only measure the company could implement immediately to realize savings. In all, Bell Associates designed a plan with long-term effects on overall claim costs and utilization.

The Results
The company realized a $757,000 savings in the first year due to the changing of the stop loss, removing the Medicare eligible retirees from the current active plan to a Medicare Managed plan and changes in ancillary providers. Additionally, pharmacy claims dropped significantly from 38% to 21% of the overall claims.

Now in the fifth year of a 5-year plan to control healthcare costs, the company continues to encourage employees to proactively engage in preventative care, such as annual physical exams, provides monetary incentives to employees to increase awareness of overall health, and actively involves employees in making better economical decisions on their medical health spending. By providing incentive to both the employee and spouse, the Company has increased preventive care visits by 79%.

The Company maintains one of the very few large group grandfathered plans. The per employee/per month costs for medical, Rx, and employee out of pocket cost decreased by 27.76%.