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Case Study: Transforming Employee Benefits with Level Funded Health Insurance

Introduction:

XYZ Corporation, a midsized company with 125 employees, was facing the challenge of rising health insurance costs while striving to provide quality benefits for their workforce. In 2020, they made the strategic decision to transition to a level funded health insurance program to improve cost control and enhance employee benefits.

The Challenge:

XYZ Corporation was grappling with traditional fully insured health plans that offered limited cost control and lacked transparency. Premiums were escalating annually, impacting the company’s bottom line and putting pressure on employees who had to bear higher premium costs. Additionally, the lack of transparency in claims made it difficult for the employer to understand and manage healthcare expenses effectively.

The Solution: Level Funded Health Insurance

XYZ Corporation partnered with a reputable insurance provider to implement a level funded health insurance program. Here’s how the program addressed the challenges:

Cost Reduction for the Company:

Under the level funded program, XYZ Corporation assumed more control over healthcare expenses. They set aside a fixed amount each month for claims, resulting in reduced premium costs compared to traditional fully insured plans.
By only paying for actual claims, XYZ Corporation eliminated the inefficiencies and profit margins associated with fully insured plans, leading to substantial cost savings.

Complete Claims Transparency:

The level funded program provided XYZ Corporation with complete claims transparency. This transparency allowed the company to see precisely where healthcare dollars were being spent, which was not possible with their previous plan.
Detailed claims data enabled XYZ Corporation to identify trends, high-cost areas, and specific healthcare needs within their employee group.

Unused Money Back:

Renewals Based on Utilization:

Improved Employee Benefits:

Employees received several benefits from this program, including lower insurance premiums due to the cost savings generated by the level funded model.
Increased plan options allowed employees to choose coverage that best suited their individual needs.
Claims advocates were provided to help employees navigate the healthcare system, find more affordable treatment options, and resolve claims-related issues.

Results:

XYZ Corporation experienced a significant reduction in healthcare costs, leading to improved financial stability and profitability.
Employees benefited from lower premium costs, increased plan choices, and access to claims advocates who helped them make more informed healthcare decisions.
The company was better equipped to manage and mitigate future cost increases by addressing specific claims issues within the group.
The transparency in claims data allowed XYZ Corporation to identify opportunities for wellness programs and preventive measures to further reduce healthcare costs over time.

Conclusion:

By transitioning to a level funded health insurance program, XYZ Corporation successfully reduced costs, provided enhanced benefits to employees, and gained unprecedented transparency in claims data. This case study illustrates how level funded health insurance can be a strategic and cost-effective solution for midsized companies looking to control healthcare expenses while improving employee benefits and satisfaction.

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