case studylibrary

Mercer

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Table of Contents

01/ Plan design, structure and innovation02/ Management of costs and risks03/ Compliance04/ Scalable solutions that grow with you

01/ Plan design, structure and innovation

Moving to self-insured without switching carriersCase study

• Lower paid employees with average benefits

• Reduce overall benefits budget without impacting employees

• Difficult to recruit and maintain employees, needed to minimize disruption

• Long-term relationship with vendors and hesitant to make move to new providers

Challenges

• Completed proprietary actuarial tools to assess the potential risk based on prior claims experience

• Completed in-depth analysis using NetPic, our discount network analysis tool

• Benchmarked plan design and ASO fees against our National Survey of Employer-Sponsored Health Plans

Actions

• Used tools, resources and our market leverage to negotiate new agreement with current carriers to move to self-funding with better terms and conditions

• Implemented carve-out Rx program, negotiating in rebates that were not previously offered

Results

Healthcare/nursing home client with 2,000 eligible employees

gross cost savings$1,900,000

Benefit optimizationCase study

• When taking over a new client, Mercer performed a design review analysis of the groups current plan designs, looking for savings opportunities

• One area of immediate concern was the level of stop loss coverage

Challenges

• Mercer provided the client with an analysis on their current benefit plans

• Analysis demonstrated an immediate concern of the current stop loss level and the years of overpayment for that level of coverage

• Illustrated through benchmarking, financial analysis and claims history where there were savings to be had by moving closer to benchmark for Stop Loss coverage on a group their size

Actions

• Used Mercer’s negotiating leverage for additional fee concessions based on the years of overpayment

• Client agreed with the analysis presented by Mercer

• Increased Stop Loss Coverage by 1.5 times their current coverage

Results

Benefit administration industry with 700 eligible employees nationwide

estimated first year savings of $529,000

02/ Management of costs and risks

High number of large claimantsCase study

• Sample of claims based on combined financial/stratified sample

Actions

• Overpayment due to incorrect claim administrator pricing

• Overpaid maternity claims due to not applying coinsurance to physician’s billing

• Underpayments due to system setup issue of applying deductible to emergency room services

• Overpayments due to incorrect allowance for out-of-network claims

Results

• Client claims handled by a dedicated service unit

• Monthly audits of 20 claims per month

• Correction of system configuration for emergency room claims

Indirect ROI

Client with 500 employees seeing increasing claims costs due to large claimants

direct ROI of $99,000

Negotiating to leverage savingsCase study

• Pharmacy coverage carved in

• Rx trend continuing to outpace medical trend at an alarming rate

Challenges

• Performed full marketing

• Analyzed Mercer’s Rx Options collective for preferred contract terms and pricing

Actions

• Utilized collective as leverage through negotiations with the carrier for more favorable contract terms and secured $300k in savings without having to change Pharmacy Benefit Managers

• Projected savings of over $400,000 annually

Results

Private equity client with 400 employees in NYC

estimated first year savings of $300,000

Offset catastrophic claims experienceCase study

• Renewal from current carrier was unfavorable (40% increase)

• Increase was a result of poor catastrophic claims experience

Challenges

• Did a full marketing for the client, with six carriers

• Included three vendors from Mercer’s Stop Loss Coalition

• Negotiated a competitive rate and provisions for the client

Actions

• Client moved to a new provider that was part of the Mercer Stop Loss Coalition

• New coverage terms included a 40% renewal cap, with no new lasers at renewal protection

• By being part of the Mercer Coalition the client is eligible for the profit-sharing arrangement which could result in a dividend at no additional cost

Results

Market and consumer research client with 700 covered employees nationwide

estimated first year savings of $220,000

03/ Compliance

HIPAA privacy and security complianceCase study

• Renewal from current carrier was unfavorable (40% increase)

• Increase was a result of poor catastrophic claims experience

Challenges

• Did a full marketing for the client, with six carriers

• Included three vendors from Mercer’s Stop Loss Coalition

• Negotiated a competitive rate and provisions for the client

Actions

• Client moved to a new provider that was part of the Mercer Stop Loss Coalition

• New coverage terms included a 40% renewal cap, with no new lasers at renewal protection

• By being part of the Mercer Coalition the client is eligible for the profit-sharing arrangement which could result in a dividend at no additional cost

Results

Self-insured client

Need Review compliance with HIPAA regulations in light of the acquisition

Benefit Gap analysis completed to identify needs

Value Reduced risk to ensure go forward compliance

ERISA ProsCase study

• Current wrap plan document was a combined Plan Document and SPD which did not provide an “easy to understand” employee summary of the benefits

• The current documents did not contain the most recent regulatory updates

Challenges

• Mercer partnered with ERISA Pro utilizing Wrap Tight to provide wrap plan documents and wrap SPDs for our client

• Worked with the client to complete a plan document questionnaire which enabled accuracy and review of plan details prior to production

• Mercer provided review by our Regulatory Resources Group (RRG) team for compliance check

Actions

• Mercer was able to provide a fully integrated Wrap Plan Document and separate SPD

• Provided client with a simple solution for their employees that was easy to produce and complied with all regulations

Results

Solar sales and installation client with 2,100 eligible employees nationwide

Need A compliant, administratively easy and cost effective solution

Benefit Simple solution driving compliance

Value Easy to produce compliant documents for employees

04/ Scalable solutions that grow with you

Communicating during COVID-19Case study

• Experiencing rapid growth

• Employees with limited access to computers

Challenges

• Implemented iNGAGED, a company branded and personalized app

• Downloading the app was optional for employees

• App housed all employer sponsored benefits and company information

Improving the experience

• CEO required all employees to download app once COVID-19 was diagnosed in the US

• Utilized push notifications to communicate location closures and impact

In times of crisis

Casual food restaurant with 30 locations over a large geography

Need Ability to quickly communicate changes regarding work status and company updates

Benefit App is a one-stop resource for all employee solutions and communications

Value Able to communicate and get information and updates to employees during this critical time