Automation Company Case Study

The Challenge

A full service office automation company headquartered in Brooklyn, NY and operating in 8 states had 322 employees on their healthcare plan when they were introduced to Andus Health Benefits in 2016.

The company was in a fully insured program with a brand name national carrier network. They were paying a total premium of $3,700,000 and were facing a 32% increase which would have resulted in total premium of $4,884,000.

Because of their size, the company was receiving some basic claims data, however, the data was very confusing and ultimately not very useful to them.

Their large increase was being attributed to two high claimants. The company was contemplating a significant increase in employee deductibles and out of pocket expenses to mitigate the size of the increase.

As is often the case in most healthcare plans, a small percentage of the population drive a large percentage of claims and overall plan expense.

Many times carrier/broker plan design changes can penalize those who use very little to moderate levels of healthcare.

This can create adverse selection where good risk actually migrates off of the company’s healthcare plan.

The Solution

The company engaged Andus to implement its unique partially self-funded purchasing model. Andus recommended the company keep their current plan design offerings intact.

The first year would be critical in learning key cost drivers, utilization, and member behavior which in turn would lead to custom plan design changes in year two based upon real usable data.

Andus was also able to determine that the two high claimants on the plan were not projected to be high claimants moving forward, therefore, the strategic way in which Andus approaches the stop-loss reinsurance markets, allowed for the company to have their risk assessed properly.

The Results

The company completed their first year in the Andus Model with a total spend of $3,325,956 for a total savings of $374,044.

Savings versus the 32% renewal they were facing was $1,558,044. Andus in year two was projecting total spend of $3,896,658 with an increase in the group’s enrollment.

Had the group stayed the course they were on, their fully insured spend would have easily exceeded $5,000,000 so savings in year two in the Andus model would easily have exceeded over $1,000,000.

The company is now receiving customized monthly reporting and forecasting from Andus resulting in much greater control and transparency and a far more robust benefit plan.

Total First Year Savings with Andus Health Benefits: $374,044