Helping Reduce Medical Plan Spend
The ultimate breaking point came when an employee with cancer was scheduled for surgery to have a tumor removed. The day before the surgery, the hospital called and let the employee know the surgery was canceled because the insurance did not have a network.
Brown & Brown began providing guidance to this automotive dealer in the summer of 2018 and approached health care methodology with a different way of thinking, different cost-savings strategy and a true national network.
Rather than shifting costs to their employees, Brown & Brown lowered employees’ contributions and dropped their deductibles to $1,000 in the first year. After strong results in the first year, the deductible was dropped to $900 in year two. Brown & Brown also focused on addressing the company’s large claimants, those incurring more than $50,000 in claims. These large claimants made up just 8% of the population but represented 82% of paid claims.
Under this newly designed plan, employees had better access to care at substantially lower costs. The dealer’s large claimants dropped from 19 to 9, lowering the large claim spend by 43%. HR reported its best open enrollment ever. After the first year, costs decreased by more than 15% and the employer saved over $900,000. In 2020, the company was under budget by more than $1,250,000, bringing its total savings with Brown & Brown to $2,170,000 over a two-year period.
Beyond the outstanding financial results, enrollment increased, the employees received a better plan at a lower cost, employees are more compliant with prescriptions, hiring managers’ challenges are reduced since a robust benefits plan is now in place and across the company there has been positive feedback from employees.
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