Law Firm

Challenge:

Large law firm with 125 employees on the medical plan was tired of the health plan costs merry-go-round. Healthcare is the 2nd or 3rd highest expense for the firm and had been increasing at a higher rate than any other line item on the P&L statement. The partners determined that their approach was not sustainable and had to change. The merry-go-round: every year they knew it was coming…the rate increase hits and is more than expected…Now what? Employer absorbs the increase, shifts some to employees, changes deductible & copays, changes carriers…picks the lesser of all evils. Communication to employees: “We did the best we could….” File materials in drawer and hold breath until next year. They knew what would happen next year unless they changed the paradigm.

Solution:

They decided to change their strategy to run their health plan like their business and developed a strategy that actually improved benefits and lowered costs. They believed that re-structuring the plans so that employees spent their healthcare dollars like their own dollars, they could change the cycle. It worked…was a win-win.

Impact:

From 2013-2024, costs have increased only 2.1% per year... a $5.4 million savings vs median medical trends. The actuarial value of the benefit plans has not changed in 10 years...no reduction in benefits. An employee contributed $29.92 per month for single coverage in 2014. In 2024, that number is $32.48 per month, and there is even an option for $13.24 per month...SUCCESS!