A Detailed Assessment of Vision Plans Leads to Reduced Client Costs and Increased Employee Participation
Client: Retail/Consumer Products company with 90,000 part-time eligible lives, and more than 120,000 full-time eligible lives
The client had a fully insured, 100% employee paid vision plan that had not been reviewed in eight years.
The client had been working with Pacific Resources on voluntary benefits and asked us to review the vision plans that they currently offered to their part-time employee population (initially, and then added the full-time population). The plan had been not been reviewed in 8 years.
Pacific Resources gathered all plan information and claims data. In our analysis, we uncovered three things that raised concerns:
The client’s current plan design – which was a base plus buy up option – had more discount provisions than paid in full insured coverage.
The network size and distribution did not fit the client’s needs.
The buy up plan was overpriced.
Given this, we worked with the client to develop an RFP and sent it out to the marketplace.
Geo-Access: Pacific Resources found that the geo-access could be improved by changing vendors. While some of the client’s retail stores’ access would be reduced, total access would be vastly improved.
Pricing: As anticipated, upon formal RFP submissions, we confirmed that the incumbent’s buy up pricing was high. We were able to reduce costs and mirror the provisions in the existing buy up plan.
After reviewing all the RFP responses, the client chose a new carrier and replaced the previous two-plan option (standard/buy up) with a single plan that included buy up provisions and some enhancements.
The selected carrier offered reduced standard rates, as well as reduced buy up rates, while offering several plan improvements, including:
Exam Co-Pay reduced 33%
$40 Co-Pay for all progressive lenses - paid in full
15% increase for eyeglass frame allowance
No formulary required for contact lenses
Not to exceed amounts on non-covered lens options
Diabetic Eyecare Plan - Type 1 and Type 2 coverage
Hearing provision discount
Added safety glasses benefit
We also obtained a five year rate guarantee.
Highlights and Next Steps:
The client has seen some direct positive outcomes from the new plan:
Due to reduced rates, enhanced benefits and targeted communication, plan participation increased more than 55%.
Improved employee experience through effective coordination with other benefit programs.
The client implemented a data analytics and sharing interface with their current medical carriers to help identify potential chronic health issues, such as diabetes and hypertension.
After their initial success with implementing the new vision plan to the part-time population in 2013, the client requested that we help them complete the same process for their full-time population (120,000 eligible lives).