I developed five secrets to lowering your benefits cost without changing your plan design or carrier. Out of the five, I am confident at least one will help you. I posted the first one last week. Here is number two:
Secret Two: Duplication of Coverage
Every year, I find a new plan that has duplication of coverage, where a company is paying for a benefit more than once. This is most common in very large companies, and ones that that have experienced multiple mergers.
Case Study: Duplication of Coverage
Last year I discovered that a new client had three Employee Assistance Plans (EAPs). Of the three, they only knew about two of them, and communicated only one to the employees. One EAP plan was a rider attached to a long term disability contract. Another was a rider attached to the international expatriate medical coverage. The third was a standalone EAP plan.
We decided to scrap the standalone plan and keep the two riders. We felt the rider on the expat plan served the international employees needs far better than the other two plans. Further, we decided to keep the rider on the LTD plan. Even thought it was a rider, it was a good plan and it was less expensive than the standalone plan.
Cleaning up the duplication of benefits in the scenario above took about two hours to analyze and saved my client about $50,000. Even though the savings was insignificant in comparison their total benefits cost, we would not have reached our goal ($500,000 of total savings) without eliminating the duplication of coverage.
Scour Your Plan Designs
Have someone take the time to look at all your plans and see if you can find a duplication of coverage. Who knows, you may be paying for something two or three times.
I would love to here where you have found duplication of coverage.
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