How the EVHC Team Facilitated a Brokerage Triumph to Win 800-Life Group

Facing an annual average health insurance premium increase of 23.5% with their current carrier, Anthem, after enduring increases for the past three years, a New York-based employer with 800 employees was teetering on the edge of eliminating medical benefits entirely—a drastic measure that could profoundly impact employee welfare and significantly damage the employer's ability to attract and retain talent. This dire financial situation jeopardized the brokers' two-decade-long relationship with the client. It underscored a critical need for innovative ideas and a transformative approach, not just to revitalize the renewal conversation but also to salvage the relationship and stabilize the client’s healthcare spending.

To understand the depth of the crisis, consider the immediate challenges facing the client:

• Escalating Annual Premiums: A relentless climb in premiums, exacerbated by high claim years and costly pharmaceutical benefits, strained the employer’s budget beyond sustainability.
• Recent Insurance Volatility: A tumultuous history of switching carriers each year for the past three years complicated the task of obtaining competitive quotes.
• At-Risk Benefits: The soaring costs pushed the employer to consider cutting medical benefits for their 800-life group altogether.

The broker faced their own set of challenges, particularly their need to not only assemble but also persuasively pitch a self-funding proposal to a client who had previously been led to believe that self-funding was not a viable option:

• Need for a Strategic Partner: The situation's complexity underscored the necessity for a strategic partner capable of introducing innovative perspectives and tangible tools for better control and transparency in managing healthcare costs.
• Limited Expertise and Resources: The broker, though experienced, lacked the specific knowledge and resources essential for navigating the self-funded insurance landscape effectively. They needed a partner who could provide:
  • A purpose-driven approach to crafting insurance solutions
  • Strong relationships within the insurance markets
  • A meticulous and strategic review of claims data to facilitate informed negotiations
  • Expert underwriters skilled in customizing solutions for complex needs
  • A comprehensive panel of stop-loss insurers

The pressure was intense with only a few months remaining to secure a viable solution for an effective date that was just over a month away. The broker needed to quickly align with a new partner who could deliver immediate results and long-term stability, making the case for EVHC’s expertise and resources all the more critical.

In partnership with EVHC, the broker team leveraged the potential of partially self-funded insurance, delivering significant cost savings and enhanced coverage options:

• Prescription Plan Overhaul: Revamped the prescription benefits plan, which anticipated annual savings of $276,266.
• Comprehensive Market Relationships and Claims Analysis: Utilized EVHC's extensive industry connections and data-driven claims analysis to refine the client’s insurance strategy, emphasizing sustainable cost-saving strategies and long-term coverage options.

Extensive education on self-funding culminated in a significant "Ah-ha" moment for the client during the proposal presentation:

• Breaking Down Costs: The proposal clearly differentiated between fixed costs and claims liability, demonstrating how self-funding allows for better budget control than their current fully insured model.
• Visibility and Control: The presentation showed that with a self-funded model, the company would save on fixed costs and have clear insight and control over spending. This clarity revealed potential savings on variable costs based on actual claims data.
• Budget Maximization: The presentation highlighted that any money set aside for maximum potential claims stays in the company’s bank accounts, meaning any unused funds can be kept by the company instead of paid out to the insurer—a key advantage of the self-funding model.
• Operational Control: Detailed how claims management under self-funding works and the various opportunities to optimize for both comprehensive coverage and overall savings, leading to the realization: “Why haven't we done this before? EVHC is a well-oiled machine."

The switch to EVHC's tailored self-funded insurance plan resulted in an anticipated total savings of $2,332,602 in the first plan year.

EVHC was able to accomplish this by:

• Plan Design & Carrier Relations - The new plan, enhanced by strategic benefit changes, projected an expected increase of just +2.74%—a considerable improvement over the potential maximum increase, highlighting substantial savings and effective cost management.
• Pharmacy - With guidance from EVHC, the broker team managed to cut the client's prescription drug expenses, yielding an additional annual savings of about $276,266.
• Proactive Case Management - As the year progresses and claims are processed, EVHC will continue to assist the broker and client in realizing additional savings through the comprehensive '3T approach.’
• The integrated approach - including proactive cost control and dedicated case management—helped the broker team present a convincing proposal that won them the business and positioned the client for a more financially sustainable future. The broker, now equipped with a compelling, cost-effective solution, solidified their position as strategic advisors in their client's eyes.