Axion Saves Company Over $1 Million a Year
- Industry: A tier-one auto parts manufacturer, headquartered in Michigan
- Amount of employees: 1300 employees
- Type of insurance: Self-funded group health, dental, life insurance, disability
- Valued client since: 2009
In the aftermath of the 2008 financial crisis and in the midst of a struggling automotive industry, the client was looking for creative ideas to reduce operating costs and avoid extreme layoffs. Inefficiencies in the current plan were increasing financial risk to the company due to unchecked and escalating premium costs.
Axion partnered with the client to do an audit of the current plan and to identify areas where they were over-insuring their healthy workforce. Axion found that the client was fully-insured and paying for plans whether or not they were utilized. To equip the client to provide coverage that was more appropriate for its people, Axion helped the client move to a self-funded plan — where they only pay for the plan when it’s utilized. Furthermore, Axion expanded the client’s medical plan choices, which included a variety of offerings and HSAs and the education needed to use them.
Axion also helped the client with Medicaid expansion. Axion identified a number of who would be eligible, and then provided assistance to get them off the company plan and on to Medicaid. This also included an education aspect, where the employees were walked through the process to make sure they understood the changes.
The move from fully-insured to self-funded saved the client on average $1 million a year and also provided a more fitting medical plan for its people. Employee contribution costs also increased minimally because of these savings. In the client’s first year of being self-funded, it was $214.73 and now it’s $217.39, which is a 1.5% cumulative increase. With the industry average at 7% each year, that cumulative increase would normally be 42% over six years.