Meeting Notes: Benefits Reforecast and Savings Strategy

Reforecast and Savings

  • Savings target: Initial discussions aimed for savings between 1,000,000 and 2,000,000.
  • Leadership perspective: Important to understand leadership's savings expectations and constraints.
  • Benchmark adherence: Key priority is staying within the established benchmark while achieving savings.
  • Strategic approach: Start with presenting maximum potential savings, acknowledging that not all proposals will be accepted.
  • Moving the needle: Savings are needed to reallocate funds to initiatives that improve benchmarking and employee engagement.

PTO and Employee Engagement

  • PTO concerns: Current PTO policy is off-benchmark, with 15+ days in manufacturing plants.
  • Line closures: Mandatory PTO usage during line closures is perceived as unfair.
  • Employee value proposition: Changes to PTO should be accompanied by corresponding benefits to maintain employee morale.
  • Strategic reallocation: Savings can be used to fund initiatives that enhance employee engagement and benchmark alignment.

Budget and Data

  • Budget tracking: The budget is actively tracked to monitor financial performance.
  • Data warehouse: Access to dashboards for cancer, diabetes, mental health, and GLP-1 trends.
  • Health risk analyzer: Deep dives into large claims are available for detailed analysis.

GLP-1 and Specialty Medications

  • GLP-1 savings potential: Eliminating GLP-1 coverage could save almost 2,000,000. However, this option may not be viable due to employee impact.
  • Industry changes: Anticipated savings from GLP-1s as CVS takes on more responsibility.
  • Zepbound impact: Potential abrasion with Zepbound introduction.
  • Anecdotal evidence: Some individuals are self-titrating off GLP-1s, suggesting potential future decline in usage.
  • Specialty medication concerns: Rising costs of specialty medications, including expenses related to transplants, are a significant concern.

Benchmark Analysis and A La Carte Savings

  • Benchmark categorization: Savings options are categorized based on their impact on benchmark alignment (yes, no, already higher).

HSA Plan

  • Deductible changes and HSA seed: Small deductible changes and adjustments to the HSA seed could yield around 100,000 in savings while remaining within benchmark.

Salary Banding

  • Salary banding implementation: Introducing salary banding at lower ranges could generate significant savings.
  • Proposed bands:
    • 100,000 - 125,000: 25 per month.
    • 125,000 - 150,000: 50 per month.
    • 150,000 - 175,000: 75 per month.
    • 175,000+: 250 per month.
  • Savings potential: Salary banding changes could save approximately 303,100 - 400,000.
  • Employee distribution: Most employees are concentrated in lower salary bands.

HSA Considerations

  • Limited HSA enrollment: Low enrollment in HSA makes changes less impactful.
  • Deductible and Seeding: Small deductible increases and adjustments to seeding levels can add up to significant savings.

Tobacco Surcharge

  • Decreased attestation: Fewer people are attesting to tobacco usage, reducing potential savings from surcharge changes.

Spousal Surcharge

  • Surcharge increase: Increasing the spousal surcharge from 150 to 200 could generate 155,000 in savings.
  • Perception: The bi-weekly deduction impact is perceived as nominal.
  • Transparency: Spousal status is easier to verify, making attestation more reliable.

Dental Plan

  • Dental Changes: A 50 monthly increase would equal to approximately 23 per paycheck.

Spousal Coverage

  • Cost savings awareness: Highlight potential cost savings for employees by enrolling in their own employer's plan.

Million Dollar Savings

  • Reaching the million dollar savings mark without even touching GLP one options.

Contribution Span

Contribution Plan: The breakdown for each individual, same with spousal surcharge and how many people that actually impacts.

Contribution Changes

The annual savings should be in this format.

Dental

Cost Impact: Need data on current dental spending to understand the impact of proposed changes on employees.

Data Request

Data Request: By Friday of this week.

Out of Pocket expenses

Burden Percentage: What the current out of pocket spend is.

Employee Count in Salary Bands

  • Less than 100k: 37
  • 100k - 125k: 433
  • 125k - 150k: 294
  • Removing the 100k - 125k band reduces savings by 88,000. (25 a month * # of people (294) * 12 months).

Revised Salary Banding

  • Removing 100k - 125k band:
    • 125k - 150k: 50 per month
    • 150k - 175k: 75 per month
    • 175k+: 100 per month
    • This yields 215,000 of savings.

Contribution Changes and Savings

  • Modeling Scenarios: Considering different contribution increase percentages to manage costs.
  • Current Model: Current model projects a 12.8% cost increase.
  • Alternate Model: Exploring a 6% increase to see potential savings.
  • Contribution increases need to increase at 12.8% across the board.
    Modeling the numbers for this year.

Projected Plan Cost

Project Cost: Projected plans for next year will cost approximately 11,000,000.

Status Quo Considerations

Status Quo: We are considering no factors into any of our changes.

Projected Employee Contributions

Projected Contributions: A 12.8% increase to premiums will increase employee contributions.

Contribution Analysis

  • Employee Contributions: Valued at approximately 1,000,000, reducing B. Braun's costs.
  • Reducing Increase: A 6% increase would cost B. Braun \$400,000.

Cost Offset

The cost from changes will offset cost from B Braun.

Executive Summary and Presentation Strategy

  • Target Audience: Leanne, who is not deeply familiar with benefits.
  • Presentation Style: Needs percentages, a clear story, and a condensed version of the data.
  • Key Metrics: Focus on projected costs, cost drivers, and potential savings.
  • Comparisons: Side-by-side comparison of 12.8% vs. 6% contribution increases.

Cost Increase Without Changes

  • Projected Increase: Without changes, costs are projected to increase by 12.8%.
  • Understanding the Drivers: Need to explain why costs are increasing so significantly.

Trend Data

  • Healthcare Trend Data: Useful for justifying cost increases.
  • Plan Design Changes: Can help control costs but may not yield immediate savings.
  • Multi-Year Perspective: Need to present a multi-year strategy to address long-term cost trends.

Revised Presentation Structure

  • Focus: Simplify the presentation, emphasizing key percentages and a clear narrative.
  • Executive Summary: Include an executive summary with market trends and key cost drivers.
  • Recommendations: Start with "no changes" scenario, then present recommended changes.
  • Strategic Approach: Focus on why costs are rising and how the changes can help mitigate them.
    Projected cost for 2026 status quo, and we want to show what Legrand's cost is.

Financial Considerations

Cost numbers for the current date and the end of this.

GLP-1 Strategy

  • Short-Term: Not planning to remove GLP-1 coverage next year due to potential employee disruption.
  • Long-Term: Exploring options like Lilly Direct through Teladoc to reduce costs.
  • Employee Accountability: Considering requiring accountability measures like scale check-ins for GLP-1 prescriptions.

Coalition Model Consideration

Coalition Model: A conversation about going to a new coalition to save more money.

Action Items for Friday

  • Presentation Content: Prepare a presentation with the following:
    • Executive summary.
    • Market and B. Braun trend data.
    • Recommendations chart (including alignment to benchmark column).
    • Projected cost with and without recommended changes.
    • Do a new exercise and contributions 12.8.
  • Dental Plan Changes: Will save approximately 400,000$$.
    Cost will increase 100-34,000.*