When providing benefits to small groups of employees scattered around the country, managing the accuracy of claims payments, network coverage limitations and unfilled service needs can take a serious toll on a company’s bottom line – and its reputation. IAA, a third party administrator (TPA), shares a case study that shows how it was able to help a respected national provider of residential care switch from a pre-packaged, “off the shelf” benefits arrangement to a self-funded model that offers tailored benefits on a regional level with highly responsive service. See how this move to self-funding helped the employer regain its reputation and restore employee confidence as well as lower benefits costs, improve employee access to services and experience financial savings in the process in the case study below.
For more information or to contact IAA, visit www.iaatpa.com or call (856) 470-1200.
Self-Funding Restores Employee Satisfaction & Cuts Overall Plan Costs
Adair* is a respected provider of residential care for patients with developmental disabilities and serious mental illness. With facilities in 14 states, each location has physician, nursing, therapeutic and service staff members who provide care for 25 to 40 residents.
Healthcare coverage plays an important part in the company’s culture, exemplifying the standards of Adair’s employees. Over time, Adair’s regional insurance provider and its local administrator had become ineffective at providing care for small numbers of employees in locations scattered around the country due, in large part, to limited network coverage. Employees reported regular claim errors, unfilled discounts and poor service. In fact, the problems had become so prevalent, employees began to mention them in exit interviews.
Recruiting and retention is an industry-wide problem for residential care providers, but Adair had always had better statistics than average. The company’s benefit problems were becoming a serious liability. At the same time, Adair was being hit with cost increases compounded by slipping provider responsiveness.
Adair’s CFO explained, “I can’t just sit here and watch this happen. I have to do something about it.”
The transition to a self-funded insurance plan through a third party administrator (TPA) began for Adair shortly after. This plan structure enabled Adair to break free of the constraints they were encountering with their current “off-the-shelf” arrangement.
Self-funding gave Adair the ability to design their own health plan and support it with PPO networks that match employee zip codes. Since administration would be unbundled, Adair could include performance standards for claim processing in their TPA contract. Self-funding offered many other advantages, too:
- Employee access to web-based and Call Center information services 24/7 to address questions in a timely manner
- Financial pluses for the company, including interest on the reserves and added tax advantages
- The ability to manage the financial risks of claim liability through the negotiation of stop loss insurance
Self-funding has given Adair more control with their health benefits along with a tighter rein on costs and service quality. Partnering with a TPA proved successful in lowering the cost of operations and, at the same time, delivering improved access and employee communications.
In a business where exceptionally high standards for healthcare benefits are the norm, Adair is once again receiving high marks for meeting employee expectations.
*Actual case detailed, but company name has been changed for confidentiality.
Case study supplied by IAA. For more information or to contact IAA, call Paul Kelly at (856) 470-1200.