Case Studies

Large Company Case Study

A medical practice with 109 full-time employees offers a self-funded medical plan option, a gold level PPO. The company pays 75% of employee and dependent coverage. There are also Dental PPO and Vision Plan options, of which the company pays 100% of employee coverage. Employees can add dependent coverage for these options.

The challenge:
The 38 physician owners were looking for alternative compensation strategies and creative ways to recruit physicians to their practice.

The solution:
The practice elected to add ExecSelect, a tax-advantaged supplemental health and wellness program that provides reimbursement for essentially all out-of-pocket medical expenses incurred by the physicians and their dependents. By incorporating this unique program, the practice not only enhances its benefit offerings, but also aligns with the goal of supporting the overall wellness of its employees while gaining a competitive edge in recruitment efforts.

Average Annual Claims per Physician

$8,029

Premium Cost per Member

$9,773

Compensation Value

$11,240

Total Claims Paid

$224,808

Total Premium Cost

$278,653

Estimated Compensation Value

$314,731

Claim Volume Pie Chart

The chart above illustrates claim volume by benefit category and the compensation value if these claims were funded with after-tax dollars. We assume a 40% tax rate that includes both corporate payroll tax liabilities and individual income tax.

Small Company Case Study

The challenge
A high-tech manufacturing firm with 26 full-time employees offered two medical plan options. The base plan was a bronze level PPO and the buy-up option, with a silver level PPO. The company's contributions amounted to 100% of employee-only premium and 25% of dependent coverage for the base plan. The company also offered a voluntary, low level dental plan. Only the four owners were buying up on the medical, and none were interested in the dental coverage. All had out-of-pocket expenses to varying amounts and all were interested in a richer benefit package.

The solution
Upon renewal, they eliminated the buy-up option and added ExecSelect for the four owners and their dependents, which essentially covers all the out-of-pocket expenses associated with the underlying medical plan, but also affords them first dollar coverage for many other types of medical expenses including dental, orthodontia, and vision.

Estimated Employer and Employee Savings
The following chart compares ExecSelect Premium cost to an increase in pay or bonus. This case example is based on a company covering four executives and their dependents that have a total of $30K in out-of-pocket medical expenses in a year. We use a 40% tax rate that includes both corporate payroll tax liabilities and individual income tax. By offering ExecSelect, a savings of $13,500 is realized annually.

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