Risk On Prior to 2020’s black swan (low probability/high impact) event of the COVID-19 outbreak and subsequent shutdown of the economy, your clients had the luxury of being in a position to care less about volatility and risk exposure and only about the end result....
HoldCo, a holding company with 184 employees on their fully-insured medical plan, was presented with a 23% renewal increase for 2010. Frustrated with their lack of options, and knowing that adding employees through planned acquisitions would only compound future increases, they needed a better solution.
Their broker-consultant worked with management to develop a strategy to take control of their health plan.
The first step was to transition the company from fully insured to self-funded so they could gain insight into and control over their actual claims costs. As a result of this move, HoldCo was able to achieve a 4% decrease in medical plan costs in 2010 vs the 23% increase. This was accomplished with no change to the plan designs.
The broker-consultant also had HoldCo join Everlong. In the Captive, the company could participate in the innovative insurance and funding solution that takes the profits that health insurance carriers make on individual plans and pays that money back to members as owners of the Captive. This innovative funding solution, plus Everlong’s group purchasing power, helped keep HoldCo’s future health plan increases far below what they would have been had the company remained fully insured.
In addition, self-funding and moving to Everlong enabled HoldCo and their broker-consultant to analyze and project claims costs and to take innovative steps to better manage risk and further control costs in their health plan.
In eight years, the number of employees in the plan grew to 426. Over this period, Everlong’s innovative solutions enabled HoldCo to save a cumulative total of $15.3 million compared to what the company would have spent had they remained fully insured—all without cutting benefits for the employees.
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