Situation

A 450 employee national retail chain with a partially self-funded group medical plan came to us asking for guidance with their plans.   For the last two years, the company had struggled with hiring quality personnel for their retail stores, mainly attributable in their view to the uncompetitive plan options they offered.  The organization had increased deductibles and out-of-pocket limits significantly in order to control plan costs.  Additionally, they had increased the employee and dependent premium contribution levels to a point where many of the employees chose to discontinue coverage.

To make matters worse, the company had experienced financial troubles and was beginning to feel the effects of the downturn in the economy.  Demand for their products had eroded and they were having to make tough decisions about the company’s future viability.

Solution

We conducted a strategic planning session with the employer to flush out all the issues and challenges they were experiencing.  The outcome was a 24 month formal plan that was developed capturing all the strategies, initiatives and resources that were to be deployed over that time frame.  Among them were the development and launch of an online employee survey to discern benefit plan satisfaction levels, feedback on current vendor/carrier relationships and compensation.  We then conducted a benchmarking study in order to assist the client with evaluating how their benefits package compared to industry norms.   Based on the findings from these efforts, we were able to develop a plan of action.

We recommended a change of medical claims administrators and provider networks that resulted in a 24% decrease in provider reimbursements.  The client then fortified its plan designs to bring them back up to competitive levels with their industry.  The employee contribution levels were decreased significantly.  In spite of increased enrollment after these changes, the client still managed to save over $100,000 in the first year.  Nearly immediately after the changes, the client started receiving positive feedback from the field management team that the improvements had been favorably received among the current employees and that complaints from new hire candidates had dropped off dramatically.

In the coming year, the client will implement additional steps to improve the performance of its plans.  Incentive arrangements are being developed to engage the employees in being more pro-active in managing their medical care and to make better choices with provider selection.  We believe this client will stand to benefit significantly in future years as it continues to seek out innovative strategies to control its’ costs and improve employee satisfaction.

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