Monday, June 13, 2011

Reduce Healthcare Premiums Now !

      If you select Custom Benefits Group ( CBG ) as your health insurane broker; you will begin to understand why our clients are simply not seeing what others see at renewal. Recently one of our  clients received a 21% rate increase through Harvard Pilgrim. By offering a fully-funded HRA plan, we negated the increase; improved the plan; and maintained the current cost ( for both employer and employee ). The cherry on top was that our client remained with their incumbent Provider, Harvard Pilgrim. It was the quintessential "Win-Win-Win" for Client, Provider, and Broker.

    At CBG, this is scenario occurs on a regular basis for our clients. Since CBG is fully immersed in the current health care market, we are able to deploy and present a wide variety of alternate funding arrangements that take advantage of the most common claim observation in years, that:

             "80% of health care claims are coming from only 20% of a group's population"

   If true, this would allow prudent companies to exploit this inherent 'weakness' as an opportunity to save premium dollars. To examine this more thoroughly, we conducted a Research Study, "Managed Care: An Inefficient Dead End"  ( Calders, Inc. Vol. 1, 2010 ).

   "Facts, Data, and Logic" - are the terms that apply to most challenges we encounter in the employee benefits marketplace at CBG . We applied these same principles when we partnered with D2 Hawkeye, Inc., the largest group health claim aggregator in New England as well as the Massachusetts Health Purchasers Group, a non-profit firm that assists large firms negotiate contracts with providers in MA.. In addition to some other important findings, which can be found on our website, ; we discovered that nearly three quarters of all the companies we examined indeed had a small sub-set of their population, 23% producing almost 81% of their total claims.

  By examining close to 500 companies with an average population of 105 employees, we were able to validate the 80/20% Claim Paradigm.  CBG has not only capitalized on this information, but we also
discovered the correct high deductible to be offered with an Health Reimbursement Acccount ( HRA ) for our clients based on a number of important variables.

   While we have allowed other brokers to view our comprehensive review of healthcare claims and patterns; we did not provide them with the 'secret sauce'. Their are many variables that need to be examined before a firm implements an HRA or updates their existing HRA plan. For example, every Provider has a different deductible break-point. In other words, one Provider may reduce their base rates by 7% if a company chooses a $1,500 deductible versus a $1,000 deductible. Another Provider offers a 12% reduction for the same change. Other variables include case size, industry, contribution levels, etc..
   CBG is an independent Employee Benefits Brokerage firm located in Andover, MA. 01810. If you or your company are interested in what we can do for you, please contact:

Michael McCullom at 978-662-5120 or e-mail at