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CASE STUDIES
Here are case studies from our previous clients, showcasing the challenges they faced, the innovative solutions we provided, and the successful outcomes achieved.
The McGraw Group
The Situation
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200 employee CA-based insurance company facing 42% renewal increase from current insurance carrier approaches Jack weeks away from renewal.
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Most alternative carriers declined to quote the group.
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Total cost upon renewal will be $2.5 million.
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No creative solutions coming from current broker.
Our Solution
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Jack identified a carrier with which the company had a positive experience in the past.
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Working with this carrier, Jack created a “Wrap” plan design to maintain benefit levels while mitigating most of the impending renewal increase.
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$2.1 million in projected total cost.
The Result
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$400k, or 16%, in savings versus renewal.
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$2.1 million in actual total cost.
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Maintained or improved Medical benefits for all employees.
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Maintained Dental and Life benefits for all employees
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Improved Vision benefits for all employees.
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Custom-designed company-wide Wellness program (first in company’s history).
Year 1
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Insurance carrier initially issued a 12.5% renewal increase.
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Through negotiation and a revised “Wrap” plan design, Jack created a plan which mitigated the entire carrier renewal increase.
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Plan highlights:
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“Flat” renewal. Projected annual cost of $2.1 M.
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Held McGraw’s benefit cost constant for two years without reducing any benefit levels for employees.
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Maintained medical, dental, vision and life benefits for all employees and expanded the company-wide wellness program.
Year 2
Goodwin Company
The Situation
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125 employee contract manufacturer specializing in the production and distribution of liquid products, with facilities located in Los Angeles, CA and Atlanta, GA, approaches Jack two months before renewal.
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CA and GA workforces are covered under separate medical plans. CA plan facing 3% renewal increase. GA plan facing 20% renewal increase.
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GA workforce has been unhappy with current carrier/network for years. No creative solutions coming from current broker.
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Jack is tasked with the following job: Move GA group to a top tier carrier/network and mitigate entire renewal increase on both plans.
Our Solution
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Jack identified top tier medical carriers with attractive pricing in their High Deductible Health Plan portfolio. Considered consolidating the plans with one national carrier, but it made more financial sense to keep the plans separate.
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The new CA carrier offered a comparable network to the current network (100% network utilization match). The GA carrier offered a dramatic improvement from the current limited network.
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Working with these carriers, Jack created “Wrap” plans for CA and GA which improve benefits and offer projected savings of 21% and 25%, respectively.
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Jack “bundled” ancillary lines for additional savings while maintaining dental and vision benefits for all employees
The Result
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On a consolidated basis, 23% in savings versus former medical plan.
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Improved medical benefits for all employees; maintained dental and vision benefits for all employees.
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Reduced or maintained premium contributions for all employees.
Tower Communities, LLC
The Situation
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CA-based national real estate investment company contacts Jack two months before renewal.
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Unsatisfied with current carrier.
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Currently offering relatively “rich” medical and dental benefits
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Interested in considering creative plan design strategies which enable the company to save money without cutting benefits.
Our Solution
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Identified a strong national medical carrier with a larger network than the current carrier’s.
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Working with this carrier, created a “Wrapped” medical plan design.
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Negotiated a “rate freeze” on the dental plan.
The Result
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38% increase in savings versus former medical plan.
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0% increase in cost on the dental plan.
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Eliminated employee premium contributions for all employees.
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Maintained medical benefits for all employees.
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§Maintained dental benefits for all employees.
American Drilling Company
The Situation
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In 2014, an LA-based 125 employee manufacturing company with only 20% plan participation was potentially facing an additional $600,000/yr in cost due to ACA Compliance concerns.
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The employer's current broker was offering no way to mitigate this additional cost and told the employer there was no way to avoid it.
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The employer complained to its Property & Casualty broker that its Benefits broker had no creative ideas. The P&C broker immediately recommended the employer contact HCG, due to its reputation for delivering the most creative and cost-effective solutions in the SoCal medical plan design space.
Our Solution
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HCG identified a plan design approach that enabled the employer to meet all ACA Compliance requirements, while actually reducing total cost (entire potential $600k increase was mitigated, as well), while simultaneously improving benefit levels for all employees who were covered at the time.
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HCG identified a major medical carrier who was offering a Special Enrollment Period, during which all normal participation requirements were waived.
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In addition to the reduction of total cost and the dramatic improvement in member out of pocket cost, the new carrier actually offered a richer provider network in the employer's geographic area so it was Win-Win-Win situation.
The Result
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The plan functioned well and experienced single-digit percentage increases at renewal.
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HCG was praised by employees and management for its level of service throughout the plan year.
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In Year 3, the company was sold to a private equity investor who demanded that the employer now work with its preferred insurance broker, the third largest broker in the U.S.
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HCG lost Broker of Record status for five years while the employer was forced to work with the new broker.
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Throughout this period Jack received calls from the management team expressing frustration with the marked decrease in customer service and creative design ideas during renewals.
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The employer was ultimately able to get approval from its new private equity owner to reappoint HCG as the Broker of Record.
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HCG's initial plan design recommendation was so strong that, in five years, the other broker was not able to come up with one idea to make the plan design more cost efficient.
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Jack is now working with the employer and the private equity investor on new M&A projects.
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The employees are ecstatic to have Jack and HCG back in the picture.
Year 1 & 2
Years 3-7:
Sale of Company
Year 8 to
present day
Gardena, CA based 80 employee Aerospace Manufacturer
The Situation
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LA-based 80 employee aerospace manufacturer has been enrolled in the ADP "Total Source" PEO program for a decade.
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The new private equity owners contacted Jack for assistance in exiting the PEO program and establishing coverage as an individual entity.
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The situation presented several challenges due to an extremely poor plan participation percentage (45%), ACA related rating issues in the 2-99 market, no existing HR Dept, lack of English comprehension and tech savviness amongst 80% of the workforce, and a 45-day deadline to quote new plan options, implement the new plan, educate the employees and management team on how the new plan functions and enroll the group
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There were total cost issues as well. Via the ADP PEO program, the employer had access to several thousand covered lives' worth of buying power and, thus, lower rates than a typical "Small Group" plan with "apples to apples" benefit levels. Now, as a stand-alone entity in the 2-99 CA "Small Group" market, the group would be forced to accept "pooled", "community rates", making it difficult for the employer to offer the same coverage to employees that it had offered via the PEO, at a competitive price.
Our Solution
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Through the ADP Total Source program, the members were enrolled in Anthem and Kaiser for medical, so Jack quoted medical options from those two carriers and creatively implemented a "workaround" that enabled the employer to get around the carrier's participation-related underwriting guidelines.
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Because purchasing traditional, fully-insured insurance products from Anthem and Kaiser (with apples to apples benefit levels to the ADP program) would have caused a 15% total cost increase, Jack recommended purchasing the lowest cost Bronze level high deductible plans Anthem and Kaiser offer and combining them with a self-funded HRA program administered by EDIS, a CA and TX based third party administrator with over 30 years of HRA-specific focus and expertise.
The Result
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Despite all of the challenges, the new plan actually reduced total cost by 5%, while dramatically improving the out of pocket cost exposure for plan members on the Anthem and Kaiser plans.
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Implementation of a "Benny Card" debit card program for the Kaiser population. The card pays 100% of the first $5,000 of all charges at a Kaiser facility. Meaning, only about 10% of the group ever has to pay a penny in out of pocket cost throughout the plan year.
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Researched and implemented workaround for Employee Contribution issues related to the age-banded rating system in the 2-99 market.
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Assisted the employer in training a new HR/Admin Team with regard to plan administration and new hire onboarding. That has been so successful that "the students have become the teachers!"
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Via HCG's team of bilingual enrollers and Spanish education material resources, we successfully educated the Spanish speaking workforce on how the new HRA program works and it is running remarkably smoothly.
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Jack is now working with the employer on the best way to combine this plan with the plan of a 150 employee PA-based manufactuer they just purchased.
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Spec Engineering
The Situation
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40 employee San Fernando Valley-based machine shop facing yet another double digit percentage renewal increase
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No creative solutions coming from incumbent broker
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80% of workforce is of Mexican or Russian decent and speaks limited English.
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Employer referred to Jack by a fellow member of the SoCal Small Manufacturers Association.
Our Solution
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Employer had been enrolled in a "first dollar" Kaiser Permanente medical plan for over a decade.
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HCG assisted the employer in transitioning to its increasingly popular Kaiser HDHP plus "Benny Card" program.
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Employer moved to a $7050 Deductible Kaiser plan and coupled it with a $5,000 Benny Card HRA program.
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Jack and Vanessa explained the new plan design in three languages, provided multi-lingual education materials and health advocate support, and enrolled the group using WP's Pro Apply enrollment system.
The Result
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13% savings, versus former plan, in Year One, with dramatically improved benefit levels for all employees.
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The Benny Card pays for 100% of the first $5k of all charges at a Kaiser facility, so only 12% of the group had to pay a penny in out of pocket cost in Year One.
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Employer's Admin Team is now able to explain the plan to new hires in two languages
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Benny Card program is so popular we have been warned there will be a mutiny if we ever take the program away!
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Jack is now working with the company's investors to combine this plan with another employer's they just purchased.