Maximizing Savings with Level-Funded Plans for a Bay Area Employer

case study

Client Overview

S Inc. is a dynamic company based in San Jose, CA, employing over 150 professionals. Known for its innovative approach and young workforce, S Inc. had been providing its employees with fully insured health plans, which offered comprehensive coverage but left the company unable to capitalize on potential savings from low claims utilization.

Case Study

The Challenges

As a company with a predominantly younger employee population, S Inc. enjoyed a favorable medical loss ratio of 60%. However, under fully insured plans, the company was unable to benefit from this low claims experience. The insurance carrier retained all the claims savings, resulting in missed financial opportunities for S Inc.

While the leadership at S Inc. recognized this issue, they were hesitant to move to a fully self-funded model due to concerns about the risks involved in covering all potential claims. They needed a solution that would allow them to capture savings while minimizing their risk exposure.

Case Study

The Solutions

Matrix proposed a solution that balanced S Inc.’s desire for savings with their need for financial security: Level Funded Plans. These plans offer the advantages of self-funding while limiting the employer’s risk, making them an ideal choice for companies like S Inc.

Results

The adoption of level funded plans led to significant financial benefits for S Inc.:

$158,000 Savings in the First Year:

S Inc. was able to save $158,000 in the first year by sharing in the claims savings, thanks to their low medical loss ratio.

$135,000 Savings in the Second Year:

In the second year, S Inc. continued to benefit from the level funded plan, realizing an additional $135,000 in savings.

Employee Satisfaction Maintained:

Despite the change in funding structure, employees experienced no loss in benefits. The level funded plan offered the same comprehensive coverage and provider network as before, maintaining high levels of employee satisfaction.

Client Referrals:

Pleased with the results, S Inc. referred several other companies to Matrix, confident in the value and expertise we provided in optimizing their benefits strategy.

Conclusion

By introducing S Inc. to level funded plans, Matrix helped the company capture significant savings while maintaining financial security and employee satisfaction. S Inc. was able to achieve over $290,000 in total savings across two plan years without sacrificing the quality of benefits provided to their employees.

Could your company benefit from a similar
approach?

Contact Matrix today to explore how we can help you optimize your benefits strategy and realize substantial savings.