Overview

A prominent local magazine faced a critical challenge: how to enhance employee benefits while reducing costs. Traditionally, achieving both objectives simultaneously is difficult, but with strategic planning and innovative insurance solutions, we made it possible.

This case study highlights how implementing a partial self-funding plan not only delivered platinum-level benefits at bronze-level pricing but also saved the company over $350,000 within five years.

Client Challenge

The magazine industry is known for tight profit margins and competitive pressures. The client was grappling with increasing healthcare costs while striving to offer attractive employee benefits to retain top talent. The primary concerns were:

• Rising healthcare premiums year-over-year.
• Maintaining competitive benefits to attract and retain employees.
• Mitigating financial risk associated with catastrophic claims.

The client needed a solution that would provide comprehensive benefits without putting a strain on their financial resources.

The Innovative Solution

To address these challenges, we proposed a partial self-funding plan tailored to the client’s needs. This approach involves:

1. Catastrophic Claims Management: The selected insurance carrier assumes responsibility for all catastrophic claims, ensuring the business is protected from high-cost, unexpected health incidents.
2. Shared Routine Claims: Routine healthcare claims are shared between the employer and employees. This method encourages cost-sharing, reducing the financial burden on the company while keeping coverage accessible for employees.
3. Cost Transparency: The structure offers a more transparent view of where healthcare dollars are being spent, helping to identify opportunities for further cost control and efficiency.
4. Customized Benefit Design: The plan was customized to offer platinum-level benefits while maintaining affordability at bronze-level pricing. This strategic design was essential in enhancing employee satisfaction and retention.

Implementation Process

The implementation process was systematic and tailored to ensure a smooth transition:

1. Risk Assessment: We conducted a thorough analysis of historical claims data to forecast potential risks and determine the ideal funding levels.
2. Carrier Selection: Partnering with a reliable carrier specializing in catastrophic claims provided peace of mind and financial stability.
3. Employee Education: Transparent communication sessions were held to educate employees about the new plan, ensuring they understood how it worked and how it benefited them.
4. Administrative Setup: Established processes for claim submission, processing, and payment to ensure efficiency and accuracy.
5. Ongoing Support: Regular check-ins and performance reviews to adjust strategies and optimize outcomes.

Results Achieved

The results of the new self-funding plan exceeded expectations, with significant benefits realized over a five-year period:

• Cost Savings: Over $350,000 saved, allowing the company to reinvest in business growth and employee development.
• Enhanced Benefits: Employees enjoyed richer, platinum-level benefits, which boosted morale and retention.
• Reduced Premium Increases: Slowed the rate of annual premium hikes, contributing to long-term financial stability.
• Greater Transparency: Improved insight into healthcare spending empowered more strategic financial planning.

Why the Approach Worked

1. Customized Strategy: The plan was specifically tailored to meet the client’s unique business needs and employee demographics.
2. Carrier Expertise: Partnering with an experienced carrier ensured the plan was financially sound and compliant.
3. Employee Engagement: Proactive communication helped employees understand and appreciate the value of their benefits.
4. Ongoing Review: Regular reviews and adjustments ensured the plan continued to meet financial goals and adapt to changing circumstances.

Key Takeaways for Other Employers

• Partial Self-Funding is Viable: For businesses looking to balance rich benefits with cost control, partial self-funding is an effective strategy.
• Communication is Critical: Ensuring employees understand the benefits and cost structure leads to higher satisfaction and smoother transitions.
• Work with Experts: Collaborating with knowledgeable advisors and carriers can significantly reduce risk and maximize benefits.
• Regular Review: Benefits plans are not static; regular evaluations ensure they remain aligned with business goals and industry trends.

Partner with Regency West Insurance

Regency West Insurance specializes in designing innovative and cost-effective insurance solutions for businesses in San Diego and California. We understand the complexities of employee benefits and are dedicated to crafting strategies that align with your business objectives.

Why Choose Us?

• Deep industry expertise.
• Customized insurance solutions.
• Commitment to client success and satisfaction.
• Transparent communication and ongoing support.

Ready to Optimize Your Benefits Strategy? Contact Regency West Insurance today to explore how a customized self-funding plan can transform your business.

Take the first step towards smarter benefits management with Regency West Insurance – your trusted partner in San Diego and beyond.