Using Existing Group Health Medical Plan Funds More Efficiently
Client: 670 Employees, Community Bank
Situation: The bank sponsored a self-funded medical plan administered by a local third party administrator (TPA). Medical claims were high, benefits were not competitive with other local employers, and medical cost reserves were not funded.
Solution: Paradigm Group analyzed claims data and compared multiple carrier and TPA pricing proposals to determine whether the bank had the best available provider network and the most favorable network discounts. The process identified a carrier whose provider network was not only much larger but also had better discounts than the incumbent’s. Paradigm Group moved the bank’s self-funded medical plan to the new carrier/administrator.
Outcome: The change lowered the plan’s medical plan costs by 30% while providing improved benefits for employees. The bank used the savings to fund the reserves and still reduced the overall cost of the plan by 8%. Over five years, the bank’s medical cost has varied little (with few benefit changes). The reserves are very healthy, ensuring that employee contributions will not drastically increase even if there are high claims.