Promotional Products Company Turns to GBS and Avoids 40%+ Rate Increase on Medical Plan

Situation

A promotional products designer & manufacturer was faced with a 40%+ rate increase for the 1/1/18 renewal of their regional Blue Cross Blue Shield medical plan. This drastic change in healthcare costs would result in dissatisfied employees and undoubtedly lead to increased turnover. Understanding both the financial impact and personnel implications, the company’s leadership knew something had to be done.

Solution

Once the group’s census data was provided, GBS initiated the quoting and underwriting processes. Personal health questionnaires (PHQs) were completed. GBS securely sent the group’s data to multiple carriers and underwriters. Risk score, underwriting results, and rating factors were used to develop an illustrative proposal that was approved by the company. Plan options and coverage levels were confirmed and the group was enrolled in HealthyAdvantage. Beacon Risk Strategies, another AmWINS Group Company, was brought in as the MGU.

Results

GBS wrote the group at a rate only 8.5% over their current costs - more than 30% less than the Blue Cross Blue Shield renewal. The compensation for the broker (who wrote this case on behalf of a trade association and shares commissions as non-dues revenue to the association) went from PEPM to 5% net premium equivalent.

With HealthyAdvantage, the employer owns 100% of the claims fund and any unused portion is returned in full at the end of each contract period. 6 months following the effective date, plan utilization for the promotional products company was at an exemplary 53%, resulting in a $10,700 claims fund surplus.

About GBS

Group Benefit Services (GBS) is a premier Employee Benefits Administrator. We have been offering innovative benefit solutions across the U.S. since 1980. As an AmWINS Company, we have the ability to help increase profitability, grow markets and further reinforce your value proposition with clients.