Moran Benefits is helping smaller companies reduce health benefits costs while recruiting and retaining employees.
Industry: Finance Company
This client had a tradtional group health plan with a $2,500 annual deductible, 0% coinsurance, low copays for office visits and prescriptions. The annual costs for this traditional program was $240,000 per year upon there 21% rate increase. The client paid 100% of the employees premium costs. We transitioned the company to a $5,000 deductible with $0 coinsurance. Since the employer paid 100% of the premium cost a MERP was the best solution for this client. We put together a specific plan document to keep the benefit design exactly as they had on the traditional program. We were able to reduce their premium costs from $240,000 to $132,000 per year. At the end of the year we calculated a savings of $71,860. We were also to give this company a tax deduction through the MERP program via Section 105 of the tax code. A tax deduction of $36,138 from their bottom line.
This company saved $71,860 per year, or 43%, on its annual health benefit costs, with an additional $36,138 write off for our client.