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Level-Funding: Significant Savings with Unchanged Plan Design

level funding solutions

Situation

A Non-Profit Employee Benefits client for the past 7 years who faced with rising renewal increases over the last several years which were upwards of 20% topping out at 38% in 2017.  Exude was asked to propose alternatives that would not only help to control plan cost but also stop the rising out of pocket cost employees were faced with due to constant plan changes in an effort to bring premiums down to a manageable level.   

Solution

Exude implemented an alternative funding plan without disruption to plan design with a different medical carrier and effectively supported their employees through navigating a new network of participating providers. This alternative funding plan not only offered overall savings to the monthly premiums, but also provided reporting on their utilization which is something they are not able to receive within the 50-99 market segment in the fully-insured plan.   This program also awarded them with Wellness credits which would be used to further invest in their staff through wellness seminars and lunch and learns. In an organization who were faced with pay freezes for a handful of years, this helped enhance the overall cultural of the company and invest back into their staff.

Results

The result of moving to such an arrangement had the below positive affect just after year one on the plan:

  • A benefit package that was exactly the same in plan design under the alternative funding arrangement as it was under the fully insured plan
  • This program helped them to save 15% in premium increases at implementation
  • Based on the favorable utilization we were able to negotiate their 2nd year renewal down to below a 5% increase and the group currently has projected surplus from year one of $32K.
  • This option allowed them to implement an ongoing wellness solution that would allow them to engage their employees in making positive decisions about their health which will result in overall plan savings.
  • This program allowed the employee plan designs as well as payroll contributions to remain unchanged for the first time in 5 years!