Midwest manufacturer saves $1.4M in year one by moving off fully-insured
Case study by Corry Hull, REBC®, CSFS®
$1.4M
Net first-year savings vs. renewal
22%
PEPM cost reduction
8
Stop-loss carriers quoted
3 yrs
Claims data analyzed
The Challenge
A 340-life manufacturer had absorbed three consecutive 18–22% renewal increases from their fully-insured carrier. Their broker had never modeled self-funding, and the CFO assumed self-funding was only viable for employers over 500 lives. Stop-loss quotes had never been obtained.
The Approach
We ran a full actuarial feasibility study using three years of claims data obtained via ERISA data request. Stop-loss was competitively bid across eight carriers. A regional TPA with strong network access was selected. The plan launched with a $75,000 specific deductible and aggregate protection at 120% of expected claims.
Note: This case study is a composite of multiple employer engagements. Identifying details have been changed. Savings figures are net of TPA fees, stop-loss premium, and administrative costs. Sources: Internal claims analysis; stop-loss carrier quote documentation; TPA fee schedules; employer payroll data.
Methodology & Verification▾
Baseline
Fully-insured renewal premium for plan year starting January 2024, as quoted by incumbent carrier.
Intervention
Self-funded plan with competitive stop-loss, new TPA, and network optimization. Launched January 2024.
Measurement period
12-month plan year, January–December 2024.
Savings methodology
Net savings = (renewal premium) minus (actual claims paid + stop-loss premium + TPA fees + admin costs). Stop-loss recoveries included.
What was excluded
Broker compensation, internal HR time, and one-time transition costs excluded from savings calculation.
Employer size
340 benefit-eligible employees; ~290 enrolled in medical.
Funding type
Self-funded with specific stop-loss at $75,000 and aggregate at 120% of expected claims.
Source / verification
Savings verified against employer financial statements and TPA claims reports. Stop-loss recoveries confirmed by carrier EOB.