Rising Costs & Limited Levers
National Skilled Nursing Operator entered renewal with costs trending in the wrong direction. Claims were running high on its UHC plan, and Kaiser costs continued to climb.
The proposed renewal reflected that trend, coming in at 12% overall, with double-digit increases across both plans. Most UHC members were enrolled in HMOs, which limited flexibility and made it difficult to manage rising claims.
They needed a way to stabilize costs without disrupting employees or overcomplicating benefits.
A More Intentional Plan Design
Parasol Health focused on simplifying the plan structure and creating a more intentional experience.
The UHC population moved to Parasol’s innovative, Alternative reimbursement model, where two HMO options were combined into a single EPO. Employees kept access to familiar networks, but the plan became more cost-effective and easier to manage.
With the Kaiser membership the enrollment was frozen. Employees were prompted to actively review their options instead of automatically re-enrolling. The goal was straightforward: Designate new enrollees to enroll to Parasol’s plan which enabled the plan sponsor to have more transparency and cost control.
From a 12% Renewal Increase to 64% Lower Costs
The Broker of Record and their actuaries initially projected 7.1% savings from the UHC change, but the actual results were significantly stronger. In the first year, costs were:
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52% lower than prior costs
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64% lower than the proposed renewal
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45% lower than initially projected
Actual costs totaled $4.9 million, including claims, fixed costs, and reserves, compared to a projected $8.9 million.
That’s a savings of $4,410 per employee and $4 million overall.
Treating the Condition, Not the Symptom
This wasn’t a short-term fix. By pairing thoughtful plan design with a clear enrollment strategy, this reduced renewal pressure and moved forward with a benefits strategy built to perform year over year.