Unbundling for the Family-Owned Firm
The Challenge
The firm was tired of the annual renewal ultimatum from their national carrier. They were a healthy group with low claims, but they were still seeing double-digit increases because they were tied to the carrier’s general pool of higher-risk companies.
The IMPACT
The rising cost of ‘renting’ their insurance was eating into the company’s profit sharing and making it difficult to plan for the future. Leadership felt they were being penalized for their own success in maintaining a healthy and safe workplace.
The Strategy
JA guided the family owners through the process of unbundling their plan, moving them to a self-funded model with an independent TPA and pharmacy manager. This allowed them to finally keep the savings from their own positive claims experience.
THE OUtcome
In the first year of the new model, the company saved a significant amount on their healthcare spend, which they redirected into a new employee bonus program. This unbundled approach restored their sense of control and rewarded their long-term commitment to their staff.
Things Employers Should Consider
Small and mid-sized firms often assume they are ‘too small’ for the strategies used by large corporations, but that is rarely the case. Unbundling provides the transparency and control needed to stop subsidizing other companies’ risks. Employers should look for a partner who can provide the expertise to manage these custom solutions safely.