Case Studies

Client:
A hospitality company with roughly 30 hotel properties on the East Coast and 1,200 employees.

Problem:
Over several years, The Company’s workers compensation costs continued to increase. In a typical year, The Company reported between 45 and 50 lost time cases and over $400,000 in incurred workers compensation costs. Inclusives’s Claims Analysis revealed that few, if any, injured workers were returned to work in temporary alternative work (light duty) positions and that hotel general managers were reluctant to have injured employees return to work without a full-duty release. The analysis also showed The Company had a problem with delayed reporting of claims to the insurance carrier and did not have a cost allocation (chargeback) system in place.

Solution:
Inclusives Risk Control and Claims Consultants worked together to develop a Cost Allocation Program that addressed the issues of late reporting and the use of modified work. Under this program, The Company’s hotel locations were assigned charges that increased over time for late reporting of claims. To encourage the use of temporary alternative work, “stepped” charges were built in that varied with the length of time the employee was out on temporary total disability (TTD), with charges based on the historic average cost of claims for The Company. Costs for medical-only claims were charged back to the locations on a dollar-for-dollar basis, so as not to create an incentive for non-reporting. In addition, the team created the Cost Allocation Program in electronic format and provided quarterly reports to senior management, who in turn
applied the charges through The Company’s internal accounting process.

Results:
Arguments The Company’s general managers previously used to avoid the use of temporary alternative work
programs for injured workers disappeared virtually overnight. In the year in which the Cost Allocation
Program was put in place, the number of lost-time cases dropped to two from 45 the previous year.
Incurred costs for workers compensation claims dropped to less than $100,000 from more than $400,000
the previous year. The average time for reporting of claims dropped to two days.

Client:
A convenience store chain with 47 locations in Western Pennsylvania.

Problem:
When The Company first met with the Team, its workers compensation losses were out of control. Management considered employee losses to be a cost of doing business.

Solution:
The Risk Control Consultants worked with The Company’s senior management team to quickly develop and implement a Loss Control Program. The program included:
· Teaching management and supervisors that employee injuries were controllable.
· Providing Safety Training to district managers.
· Developing a store and district Loss Accountability System.
· Assisting in the implementation of a Pre-Employment and Post-Accident Drug-Testing Program.
· Working with the client to implement the National Association of Convenience Stores Robbery Deterrence Training Program for all existing employees and all new hires.
· Implementing an annual Safety Day Training Workshop for all store managers.

Results:
After working with the Risk Control Consultants for one year, The Company’s workers compensation claims were reduced by 52 percent. This client continues to build and refine its Safety Program by working closely with staff, showing annual improvement in both its workers compensation and general liability loss experience.

Client:
A mechanical contractor with approximately 125 employees, operating in several states.

Problem:
Our client, a mechanical contractor, experienced a serious injury at the
construction site of one of its most important clients. An initial accident
report showed that when our client’s employee was walking to the gang box
on the site, he received a strong electrical shock as he passed through a pool of water in which damaged welding leads lay. OSHA investigated the incident and issued numerous Willful and Serious Violations to the mechanical contractor, with fines totaling over $65,000. In addition, the project owner was considering removing our client from the site. Our own investigation of the incident determined that none of our client’s employees were welding in that area on the day of the accident and that while the mechanical contractor owned the welding leads, its staff had properly stored the leads the night before.

Solution:
Inclusive’s Risk Control Consultants sketched out a media policy, reviewed OSHA’s protocol with the mechanical
contractor’s owner and supervisor, and monitored the situation daily. We also put together a safety timeline
dating back one year using safety meetings, time sheets, work assignments, weekly superintendent meetings,
safety training records, and site safety policies. Staff then participated in a meeting with the general contractor,
who had also received hefty fines from OSHA. At the meeting, we presented documentation of our client’s
Safety Program at the site, including the safety timeline, details of the Equipment Maintenance Program, and
letters from witnesses stating that other contractors were using our client’s tools while its employees were off
site. Staff also requested increased security for our client’s equipment. In addition, staff participated in an informal conference with our client and OSHA. We presented all of the above facts and asked OSHA to downgrade all of the Willful and Serious citations.

Results:
Both meetings went very well. The mechanical contractor was cleared in the eyes of the general contractor, and
the team was successful in having OSHA downgrade all but one Serious citation. Ultimately, our client paid only
$5,000 of the $65,000 in fines and kept its largest client.

Client:
An injection plastics manufacturer with seven injection plants in the
continental United States and approximately 1,200 employees.

Problem:
The Company had no Safety Program and, not surprisingly, was experiencing high workers compensation claims and losses.

Solution:
Staff proved the case for safety to The Company’s president. With our leadership, the Risk Control Consultants developed loss-sensitive, then compliance-oriented safety guidelines to function as tools in the safety process. Employees were given a large voice in the content, implementation and execution of the safety process, and plant management was required to certify to senior management that safety guidelines were implemented at each plant. Employee accident frequency and supervisory safety activity requirements became part of quarterly and annual performance objectives, for each level of The
Company’s management. Safety education is now a cornerstone of The Company’s Safety Program. In addition, we participated in an annual review of The Company’s Safety Guidelines to ensure they support business goals.

Results:
Before the Safety Program was put in place, workers compensation losses were about $1.5 million annually, resulting from approximately 160 claims with an average cost of $9,533 each. Within two years of instituting the Safety Program, annual workers compensation losses decreased by $1.3 million to about $201,000 annually, arising from only 55 claims with an average cost of $3,670. While claims costs are expected to rise slightly as they mature, the costs and claim count are down significantly.

Client:
A Florida company that specializes in municipal water and sewage construction projects with 225 employees and annual revenues in excess of $50 million.

Problem:
The Company’s client base includes county and municipal water authorities, airport authorities, and water and wastewater treatment plants. Typical projects require excavation, grading, earthwork and roadway construction — a class of business universally recognized as high-risk even for the construction industry. As such, The Company’s marketing options are extremely limited. Few insurers are willing to write this class of business, and those that do have very little incentive to be competitive in their pricing.

Solution:
Under the joint direction of our Construction Risk Control Professionals and the insurer’s Loss Control staff, The Company adopted aggressive Loss Control measures.

Results:
Despite the challenges, the strength of the new Loss Control measures provided the team with the leverage needed to successfully negotiate a price increase running 35 percent to 50 percent less than the industry norm. At a time when market conditions in Florida were generating average price increases of 15 percent to 20 percent across all casualty lines, the team able to renew with the incumbent and to hold The Company’s increase to only 7 percent.

Client:
A leading, global manufacturer of fire and safety products.

Problem:
The Company, the North American operation of a large UK-based parent, is a multi-divisional, multi-state manufacturing employer with about 3,000 eligible lives. This client was managing 30 different local medical and dental plans but wanted to streamline administration and benefits by offering a consolidated health program.

Solution:
The team was successful in designing and implementing a fully-insured plan that provides consistent benefits across divisions, with regionally adjusted rates. The reduction in the number of plans decreased internal administration for the client. Looking ahead, the consolidated program will result in credible claim and utilization data necessary for the team to evaluate the program on an ongoing basis and identify strategic opportunities for long-term cost control.

Results:
First year savings were approximately 10 percent. To reduce future increases, the team also assisted the client with the installation of aggressive wellness, predictive modeling, and disease management programs based on the group’s specific utilization trends.

Client:
A facilities management company with over 250 management and union employees in six states.

Problem:
The Company’s benefit program included 12 different medical plans and five different renewal dates. Employees across the country had dramatically different benefit plans. For example, some employees had a self-funded indemnity plan, while others had a fully insured HMO. In addition, certain employees’ benefits were determined by their union. Administering the program was complex, inefficient, and did not allow The Company to take advantage of the economies of scale and financial leverage available to a group of its collective size.

Solution:
Our Employee Benefits Professionals inventoried the differences in The Company’s current benefit plans and developed a common plan design that met union requirements, provided consistency in benefit offerings, and reduced the employer’s risk. The team then marketed the uniform plan on The Company’s behalf to find the most suitable vendor. In the course of their work, Our professionals also identified incomplete language in The Company’s ERISA plan documents and developed appropriate
language to bring the documents into compliance.

Results:
The Company realized first-year savings of approximately 8 percent compared with the previous year. Second-year results also were favorable with an overall premium increase of only 5 percent. As a result of the savings, other benefit offerings were added to The Company’s program to enhance the overall benefits package, including a dental plan and a Transportation pending Account.

Client:
A full-service hair salon serving men, women and children with 600 employees in 40 states.

Problem:
With little cohesive employee communications and a small Human Resources staff, The Company struggled to meet its employees’ needs. Carrier service issues were not corrected in a timely manner and included significant billing and eligibility errors as well as employee customer service issues. Moreover, double-digit cost increases in previous years made future benefit reductions likely.

Solution:
The Employee Benefits Professionals worked with each carrier to correct all service issues — from questions about billing reconciliation to participant eligibility. Then, the team used its strong carrier relationships to facilitate the assignment of a new carrier service team to proactively address The Company’s needs. In addition, staff developed, implemented, and managed a new process that facilitated communication between The Company and its insurance partners, to proactively address emerging issues. Finally , the group aggressively negotiated renewals on The Company’s behalf.

Results:
In the first year, The Company’s overall premium increased only 2 percent. In the second year, premiums did not increase. In addition, with the help of the team, service issues were corrected and the additional costs associated with these service problems were eliminated. Coupled with the results of the aggressive financial negotiations, The Company has enjoyed a consistent premium level and greatly improved service.

Client:
A local beverage distributor with approximately 120 employees.

Problem:
The Company’s Employee Benefits plan design had not been adjusted to reflect the shifting healthcare landscape in several years and change was necessary to bring benefit costs to a more manageable level. However, The Company was also concerned that a dramatic change in benefits could cause a disruption in the workforce, which is part of a highly competitive labor market.

Solution:
The crew evaluated the competitiveness of the overall plan by conducting a complete marketplace review and an analysis of The Company’s claims experience and demographics. Based on the team’s findings and recommendations, The Company made several changes to its benefits program. For example, The Company terminated a vision plan that experienced modest utilization and replaced it (at no cost) with a vision discount plan. The money previously used for the vision plan was given back to employees in the form of an employer-funded Flexible Spending Account that could be used for out-of-pocket expenses.This allowed The Company to increase medical plan copays to be more consistent with marketplace norms.

Results:
The program changes recommended by staff resulted in a 4 percent decrease in Employee Benefits costs for The Company in 2004. In addition, the team conducted employee education seminars to teach employees how to utilize their Flexible Spending Accounts. This knowledge will be critical for employees as The Company considers introducing a Consumer Directed Plan.

Client:
A world leader in data, paper and valuable storage with a diverse workforce of 9,000 benefits-eligible employees.

Problem:
Recently, The Company merged with a competitor. Despite healthcare costs continuing to rise since the merger, the Human Resources team was charged with providing coverage for the upcoming plan year for employees of the combined organization at no more than a 5 percent increase over current costs.

Solution:
The team identified several plan design approaches that would meet the Company’s cost target. Staff worked with The Company and its health plan administrators to select the combination of changes that would be best understood by employees and most efficiently administered by the health plans. In addition, the staff introduced The Company to a benefits enrollment firm, whose staff explained the plan changes to employees and enrolled them in a new line of voluntary benefits brought to the Company by the team.

Results:
By adopting the teams plan design approach, The Company achieved its goal of keeping its healthcare cost increase to 5 percent and, in the process, saved $3.7 million — the projected additional cost of its healthcare plan if The Company had made no plan changes. In addition, the voluntary benefits program was highly accepted. The Company also was pleased with the enrollment firm and received positive feedback about it from employees and site managers.

Client:
A transportation equipment leasing company with a worldwide infrastructure and approximately 700 U.S. employees.

Problem:
The Company previously offered medical and dental benefits to its employees through an insurance arrangement with a national carrier. The Company utilized a minimum-premium funding arrangement to maximize cash flow and limit financial risk due to caps on its claims liability. However, The Company was dissatisfied with the significant rate increases and poor customer service it received from the carrier.

Solution:
The groups of Employee Benefits Consultants evaluated insured and self-insured plans and identified administrators who excell
ed in financial flexibility and customer service. The Team then released an RFP (Request for Proposal) to pre-qualified providers, focusing on funding options, care management programs, financial savings (fixed costs and claim discounts), use of technology , network match, and customer service. In addition, the staff assisted with the marketing, funding assessment, vendor selection and implementation of both the medical and dental programs in the same plan year. The plans were switched to self-insured arrangements with new medical and dental administrators.

Results:
The changes resulted in increased employee and employer satisfaction as well as financial savings. In the first year, the plan achieved 5 percent savings from the prior year on the medical costs and 16 percent savings from the prior year on the dental costs. These health plan savings totaled more than $250,000.

Client:
A statewide public university system with 6,500 active and retired employees.

Problem:
This client provides a wide range of benefits to 6,500 active and retired employees, many of whom are unionized. The team of professionals were first engaged to assist the client in addressing both continual double-digit healthcare cost increases and the problems associated with widespread employee dissatisfaction with their program.

Solution:
Managed care was being introduced to this rural state just as the team began working with this client; therefore the initial step was to determine the feasibility of introducing a managed care program to the client ‘s population. Staff conducted a comprehensive feasibility study, which included the key components of access, quality and cost. Once the Employee Benefits experts finished designing the new health plans, they oversaw a competitive bidding process to secure the best partner for the program. The Team recommended that the client include mental health and prescription drug benefits in the new health plans to address dissatisfaction with the specialty “carve out” vendors and, as part of the bidding process, analyzed funding alternatives for the programs.

Results:
The client secured a three-year, fully insured rate guarantee for its entire range of healthcare programs. Combined with the impact of more than 70 percent migration to the new managed care option, our staff saved the client over $12 million. In addition to the financial savings, insureds have reported improved satisfaction with their health plans, allowing the client to introduce wellness and Employee Assistance Programs to help mitigate future cost increases.

Client:
An information storage systems company with 22,000 employees around the world.

Problem:
The Company, the world’s leader in the design, manufacture and distribution of data storage equipment for computers, was seeking along-term strategy to address rising healthcare costs. The Company wanted its employees to be better-informed healthcare consumers and its managed care vendors to be more accountable.

Solution:
Staff assisted the client in all aspects of its healthcare strategy and implementation, including developing an employee health portal and establishing a claims data warehouse. The health portal brings all information related to an employee’s health and health promotion to one convenient, secure and personal Web site, using the power of the Internet to maximize available resources. The data warehouse is a powerful tool for analyzing company-specific cost drivers, holding health plans accountable, and planning future healthcare changes. The team also helped the client implement a contribution strategy to encourage employees to register at the health portal and complete a health risk assessment. The assessment data can be cross-referenced with the warehouse data to ensure all candidates for disease management are identified. In addition, the health portal was enhanced to allow employees to view their claims data.

Results:
The health portal serves as a valued benefit for the client’s employees. In addition, it has proved to be
an efficient education and communication vehicle for The Company. The data warehouse is proving to be an asset to the client’s management too, offering real-time access to its health and productivity information for planning future initiatives and holding vendors accountable for their performance. In addition, The Company has been able to keep the increase in healthcare costs below national averages.

Client:
A variety of clients in various industries.

Problem:
The paper-based Request for Proposal (RFP) process is time consuming and inefficient. Proposals are received in inconsistent formats and significant resources must be devoted to sorting RFP information before quotes can be analyzed and compared.

Solution:
Our team utilizes an online procurement tool, which simplifies the entire marketing process. First, our staff distributes RFPs to various mark ets electronically; then, carriers submit their proposals on a uniform basis in a secure electronic format. Each carrier can view its competitive ranking online, as soon as it submits a quote, which prompts carriers to “sharpen their pencils” early in the process.

Results:
With the electronic procurement system, the RFP process is completely transformed. All RFP work and correspondence go through a single distribution channel. The process is focused and streamlined, resulting in more timely submission of competitive quotes and more timely reporting. In addition, carriers have immediate information on the competitiveness of their proposals, creating the optimum competitive environment. With electronic procurement, we can now focus the majority of its resources on analyzing carrier quotes and selecting a carrier.

Client:
A national computer hardware/software manufacturer with approximately 17,000 employees throughout the United States.

Problem:
The events of September 11, 2001, resulted in more conservative underwriting practices in the group accident insurance and reinsurance markets. The Company faced unusually high renewal increases from its incumbent vendors.

Solution:
To neutralize the anticipated negative financial response of the incumbent carrier, the accident coverage experts aggressively marketed The Company’s Business Travel Accident and Accidental Death and Dismemberment insurance plans.

Results:
The team’s leverage in the marketplace and the competition created by the bidding effort resulted in a 29 percent savings for The Company over the next three plan years — and The Company was able to remain with its existing carrier.

Client:
A national, publicly traded medical products and services company with more than 3,000 full-time and part-time employees.

Problem:
The Company’s health plan costs, which were already significantly above the national average, were increasing at a rate of over 40 percent per year, despite a strong provider network, lean HMO plan design, high employee contributions, and new insurer-mandated benefit exclusions. These increases were making healthcare un-affordable for employees and the Company noncompetitive in attracting and retaining staff in the local marketplace. Unless the team has a written agreement where the company represents that it will be acting in a broker’s capacity and will be compensated only by agreement with the client, Staff typically is acting in an agent’s capacity as a representative of one or more insurance companies. In such agent cases, staff receives commissions from the insurers and may also receive contingent compensation, based on factors such as volume or profitability . The teams may be a party to other compensatory arrangements with insurers or other intermediaries with or through which places your insurance. Staff may also receive interest on fiduciary or trust accounts in which premium payments are held before payment to the insurers. At your request, our staff will be pleased to supply further details of any such compensation plan that relates to your account.

Solution:
The team first met with The Company’s senior management to better understand the issues affecting the business. With this foundation, Staff then analyzed the business and the claim utilization patterns of enrolled members and identified several key factors contributing to the cost increases. High utilization of discretionary health services; adverse selection due to the existing contribution strategy;and a disproportionate number of members with large claims, multiple inpatient admissions and expensive pharmaceuticals resulted in premium increases that were unsustainable for The Company and unaffordable for its employees. We recommended a Consumer-Driven Health Plan strategy that focused on financial incentives to drive prudent spending, disease management, employee education and tools, health promotion and wellness. To achieve these goals, we implemented a medical program that wrapped a consumer-driven model around three plan options with varying employee contribution levels to satisfy the financial needs of The Company’s diverse population.

Results:
The Company adopted the program proposed by the team and saved more than $3 million of premium in the first 18 months, which equaled $0.11 per share. Further, the plan continues to demonstrate its effectiveness. Two years after implementing our strategy, annual program costs are still below pre-Consumer Driven Health Plan levels by $1 million.

Client:
An international soft drink manufacturer.

Problem:
This internationally known soft drink manufacturer provided a broad menu of voluntary programs and benefits, including group auto and home insurance. However, the platform of products and services became so complex that it was too much for internal staff to administer efficiently. The Company wanted to implement a more streamlined and efficient way for employees to access the various insurance plans and to enroll for coverage in programs via self-service online tools.

Solution:
The team partnered with a technology company to create a website that allowed employees to view, select and enroll in coverages online. The system is modular and, therefore, easy to modify as the plans change.

Results:
Staff brought its insurance expertise and mark et knowledge together to produce a workable solution in a cost efficient manner. This solution also resulted in an estimated six figure savings in internal costs previously required to administer the voluntary benefits plans.

Client:
A leading global supplier of high performance semiconductor products
for multiple end-markets.

Problem:
This semiconductor company was divested from another company. The human resources team at the new, independent Company, wanted to ensure that the benefits program was competitive within the industry, cost effective, and, most importantly, reflected the new culture The Company wanted to establish.

Solution:
The team conducted an external survey to determine the competitiveness of the overall benefits program. Next, we completed an internal survey to gauge employee perceptions. Staff then used this data to redesign the program, select quality carriers, negotiate rates, and construct communications material to introduce the new program.

Results:
The teams redesign effort resulted in an annual cost decrease of 14.3 percent in The Company’s Health and Welfare budget. Since staff redesigned the program, the experts were actively involved in monitoring the ongoing performance of each carrier to ensure that the client’s original goals continue to be met. Each line of coverage is subject to a comprehensive quarterly review that regularly challenges carriers to deliver products and pricing that meet the client’s high standards. The staff’s ongoing, intensive efforts have resulted in annual cost increases well below national published trends and The Company’s continued satisfaction with its consulting services.