HVAC Company – Case Study
A mid-sized Long Island company contacted us in February of 2015. They are a rapidly-growing water treatment/HVAC Company with offices throughout the Northeast and approximately 175 employees.
Objectives: Cost, Communication, Service, Compliance
They had been with the same benefits advisor for over 20 years. Several months before contacting us, they hired a new broker hoping to get fresh ideas. The new brokerage is known for being a large agency with seemingly unlimited resources. At the time, the HVAC company’s chief concern was reducing their skyrocketing health insurance premiums. In response, the new broker recommended a high deductible health plan (HDHP) in combination with a health reimbursement account (HRA) funded by the employer. Their rationale was that the HRA funding would be substantially less expensive than the premium for a traditional (non-high deductible) plan. Despite having saved the employer nearly $200,000 at the time they contacted us, they were disappointed in the new broker for two reasons:
1. The new broker could not effectively educate employees on the logistics of the health reimbursement accounts. Employees were confused about how it worked, when they should pay for services, and how they would be reimbursed. In dozens of instances, employees’ HRA balances did not match up with their deductible balances at United Healthcare, meaning they were not utilizing their HRA funds correctly. Since the HRA vendor and the insurance company do not communicate with each other, it’s up to the employee to make sure claims are submitted to the HRA so that they are adequately reimbursed. The employer’s Director of Operations was inundated with employee questions and complaints on a daily basis which she had never previously encountered in her 7 years with the company.
2. Service with the new broker was very poor. Since they are such a large agency, a 175 life group does not get priority over their many larger clients. The Director of Operations indicated it would be 4-7 days after reaching out to her representative before she heard back.
After reviewing their concerns, I presented several immediate solutions, and the group appointed us as their broker. We implemented the following step by step plan:
1. Reconciled HRA Accounts:
We reconciled any and all accounts where the balances at the HRA did not match up to the deductible amounts used at the insurance carrier, United Healthcare. Once the accounts were reconciled, claims were submitted to the HRA vendor and reimbursement checks were paid out. The owner was thrilled when he received a reimbursement check for over $4,000 that he had paid out of pocket unnecessarily.
HRA Roadblock: The current HRA vendor had a relationship with the prior broker and notified the group that they would be canceling the HRA within 30 days if they did not move their account back to the prior broker. The group refused to do so as they were thrilled with our efforts. We were faced with the difficulty of moving them to another HRA vendor in the middle of a plan year and with extremely short notice. However, left without a choice, we facilitated the move to our preferred HRA vendor effective June 1, 2015. From June 1st on, all claims (including past claims) were processed through the new vendor. By moving TMG to a new HRA vendor, we were able to save the client $20,000/year in fees. Their previous vendor had charged a percentage of what TMG saved by using a HDHP/HRA arrangement versus a traditional non-high deductible plan.
2. Ongoing Service Highlights
My team is comprised of the highest caliber of professionals. The client has thanked us on many occasions for our prompt, same-day responses, expert knowledge, and eagerness to keep their benefits program running smoothly.
Some of the additional support we have provided them with include:
– Processing all enrollments and terminations and sending the HR director confirmations
– Providing concierge HRA claims processing support
o Many employees send us copies of their receipts and EOB’s, which we submit on their behalf to make sure they are reimbursed correctly.
– Arranging same-day onsite grief counselors when an employee unexpectedly passed away
– Successfully onboarded 20 new employees immediately following an acquisition
o Each employee had a member ID number the same day we received their enrollment data.
o One employee was in the middle of ongoing treatment with an out-of-network provider and we successfully arranged for transition of care benefits which covered him for 3 months until he was able to find a provider in-network.
– Setting up an individual plan for the owner’s son who reached the dependent age limit on their health plan
3. Compliance Support
– We spearheaded the preparation and filing of their 1094/1095-C forms.
– We have an ACA Attorney on retainer and engage his services frequently as a result of the ever-changing health insurance landscape. Our attorney, Robert Noonan Esq, is well known in the industry and frequently lectures for the National Association of Health Underwriters.
– We performed a complete review of their compliance practices.
– Moved TMG to a self-insured plan without disruption
– Moved TMG to a Different HRA vendor with better reporting and service. Fees were $20,000 less than the prior vendor.
– In addition to on-site enrollment meetings, we have held two separate refresher seminars for employees covered under the HRA plan. The materials distributed were easy to follow and TMG employees are now using their HRA effortlessly.