THE CHALLENGE
An industrial machinery company with 10 branches in 3 states had 7 fully insured medical plans between 4 different insurance companies. The company was suffering unsustainable, double-digit annual renewal increases in addition to a misalignment of economic objectives between the employer and employees.
THE SOLUTION
Over several years, Alera Group implemented a full replacement CDHP, maintaining the same economic value of the previously established benefits. Alera Group organized an alternative HSA plan to cover employee medical expenses to supplement the company’s self-funded HRA. The Alera Group team conducted health screenings to determine important areas of focus, leading to an employee cost-incentive program for refraining from tobacco use and engagement in various other wellness practices.
THE RESULT
The company saved $2.5 million over 5 years and lowered their renewal increases to an average of 3.2% a year. The company had multiple years with no premium cost increases for employees and the average claim cost per covered member was significantly reduced. All of these changes were implemented without reducing the employees’ benefits.
DID YOU KNOW?
According to the National Business Group on Health, large companies predict the total cost of workplace health coverage to reach an average of $15,375 in 2020 – a dramatic increase from $14,642 in 2019.
