Traditional benefit solutions just don’t work anymore. “Tendering or quoting” a benefit plan does not provide corporations with any long term tangible savings. All that it accomplishes is a one-year rate discount and usually an ensuing large rate increase the following year.

Alternatively, using a fragmented benefit plan approach, or a variety of insurance companies for different components, ends up lessening negotiating power with each company and also creates additional and unnecessary administrative work for corporations.

There is no magic when it comes to the pricing of a benefit plan. All insurance companies base their rates on a combination of a group’s claims experience and the insurance company’s administration cost. The administration cost is commonly expressed as a Target Loss Ratio (TLR). For stand alone groups, an insurance company bases its expenses on the overall premium level of the short term disability, extended health and dental care benefits of that group. Therefore on a stand alone basis the administration expenses reflect a group’s own purchasing power.

BENEflex® has its administrative expenses based on the overall volume of all companies participating in the plan, therefore providing for economies of scale increasing your purchasing power.

>> Collective Purchasing Plans – The new battleground

>> The benefits of employee benefits

>> To TPA (Third Party Adminstrator) or not to TPA?