One example of our flexibility in plan design involved an upscale furniture business with four retail locations and a large warehouse facility. They had used the services of another PEO for several years but had become frustrated with the yearly double-digit cost increases. When they sought relief by making changes in the plan design they were told that they had only three plans to choose from and that they had already selected the plan with the lowest premiums. They contacted us hoping we might have a better answer.
When we met with the owner, he told us that he could no longer afford the other PEO’s health plan. He noted that business conditions had adversely affected his business and that he had to do something to control costs. He had developed a budget, and asked us to design a plan that fell within its parameters.
We went right to work gathering census data and circulating individual medical questionnaires. We went to the market, soliciting quotes from nine different carriers. We then completed a field underwriting process to secure the best rates. After that, we designed a dual-choice plan using a high deductible, lower co-insurance PPO as the client’s basic plan, and a low deductible, higher co-insurance PPO as their enhanced option.
The company agreed to pay 100 percent of the basic plan for all employees at a cost just less than what they had previously budgeted. Employees then had the option to “buy-up” into the better plan by paying the difference in the monthly premium. This dual-choice plan allowed the company to provide basic insurance to all of its employees, including catastrophic coverage, at an affordable cost. It also offered interested employees a high-end PPO option that did not require the company to pay for the expanded discretionary coverage.