Change is hard. Especially when that change comes at the end of a 20-year relationship.
But, for one nearly 200-employee independent private school in New York City, tackling change head-on resulted in $1.8 million in savings for year one and nearly $1 million in annual savings over each of the following three years.
How? By converting to self-funded insurance with guidance from an experienced consultant.
COMING TO THE TABLE
For many large employers, periodic health and welfare benefit requests for proposals (RFPs) are a vital part of keeping costs down.
For this institution, a health plan RFP offered the opportunity to learn more about self-funded insurance, a strategy they were interested in but that wasn’t offered by their broker of two decades.
That’s where Corporate Synergies comes in.
In a self-funded arrangement, the employer pays for insurance claims as they happen, rather than paying a regular premium to an insurance company. While this makes the employer responsible for managing risk, it offers greater transparency, full access to data and better control over the program. In a well-run program, the employer often realizes cost savings.
THE CORPORATE SYNERGIES ADVANTAGE
With a demonstrated history of effective self-funded transitions, Corporate Synergies presented several different options for the institution, as well as a variety of employer- and employee-focused resources including a compliance team, employee communications team and BenefitsVIP® employee advocacy program.
With these resources in place and a well-defined project plan, transitioning to a funding arrangement once considered risky by some comes with minimal disruption.
Corporate Synergies’ deep expertise in self-funding also means they can help clients find the right vendors to help run a self-funded plan. The Corporate Synergies team helped to vet the institution’s third-party administrator, stop-loss insurance carrier and pharmacy benefit manager.
Employee experience should never be impacted by changes in funding arrangement. Instead, the process should be frictionless. To that end, Corporate Synergies mirrored the institution’s existing plan and coverage for its employees.
Even with identical coverage and relatively stagnant claims utilization year over year, the institution saved $1.8 million in total health expenditure in year one. They realized these savings because they controlled their claims and were not burdened by the inevitable premiums and increases of a fully funded program. In every year since, the employer has saved over a million dollars each year compared to a fully insured equivalent.
Self-funded insurance, once exclusive to the largest employers, can work for a wide variety of organizations with the right expertise. If the plan is built correctly and backed by experience, the benefit outweighs the risk.