VBBD—Case Study Shows Real Savings

McCormick, a consultant with Fallon Benefits Group in Atlanta, made her remarks at BLR’s Advanced Employment Issues Symposium, held recently in Las Vegas.

Case Study in VBBD

Some facts about the client:

• Global presence with more than 7,000 covered lives
• Employee population includes office staff, manufacturing, and drivers
• Average employee age: 45 years
• Very low turnover

The client established the following healthcare program objectives:

• Control escalating healthcare costs without shifting costs to employees.
• Manage the impact of chronic illness proactively.
• Reduce the cost trend to a level below the market average.
• Improve or maintain the health of all plan participants.
• Foster a culture of health.
• Implement a world-class wellness program.

The program was put into place over a number of years, as follows:

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The Results

The chart speaks for itself—Per Employee Per Month (PEPM) costs are contained.

McCormick offered several more tips for those considering VBBD:

• Keep it simple. If the program is too complicated, people won’t participate.
• Honor the health culture. (Don’t, as one client did, celebrate the end of a dieting program with cake and ice cream.)
• Work with your carrier. Many carriers offer or can be talked into offering wellness programs at no cost.
• Know your numbers. Be sure that employees understand what “their numbers” (e.g., cholesterol, blood pressure, body mass index) mean.
• Don’t overestimate ROI. If you do, management will pull the plug before you have a chance to show results.

Benefits design—important, to be sure, but not the only challenge on your plate. “Maintain internal equity and external competitiveness and control turnover, but still meet management’s demands for lowered costs.” Heard that one before?

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