Employee Health & Welfare

Turning Challenge into Opportunity

With a constantly changing economy, continually escalating health care costs and a myriad of privacy and compliance laws to contend with, there are many challenges in offering benefits and health insurance to your employees. Many companies tend to take incremental steps by reducing health benefit levels or increasing employee cost sharing…providing only marginal relief while eroding employee perceptions. Lockton can help you turn these employee health benefit challenges into an opportunity - an opportunity to re-think your employee benefits strategy and the role it plays in attracting and retaining employees.

The Consulting Broker

The increased cost of employee health benefit plans has been accompanied by new and innovative offerings from providers trying to help their clients contain costs. As a consulting broker, we track these new health insurance offerings, understand your corporate objectives and work to deliver the optimum benefit solutions that meet employees’ needs and align with your organization’s goals.

Our client, Alice McAbee, talks about Lockton

We will help you analyze your current employee health benefits plan situation, project your future needs and design a comprehensive benefits plan drawing from the large array of services available from our pool of carriers and service providers. Your Benefits team will monitor your plan performance to make sure there are no surprises throughout the year.

The Steps Beyond

In addition to designing a creative employee benefits plan with your specific objectives in mind, our associates use the vast intellectual and technology resources available to them to further improve employee satisfaction and cost containment into the future. We will help your HR department develop a thorough communication program to push benefits information throughout your organization. We also have tremendous experience in helping clients educate their employees to be savvy health care consumers. We’ll work with you to invoke a proactive wellness and disease management program that encourages healthier lifestyles, reduces costs and breeds healthier attitudes.

Your Life Cycle Partner

Our objective is always to be more than a vendor. We want to be an active participant in your employee benefits health insurance planning and implementation process. Our associates want you to feel they are an extension of your HR department…an extension that has intimate knowledge of all available benefits solutions and has the resources and experience to make them successful in your organization.

To read more about our services, download one of our below brochures:

Health & Welfare Brochure*
Employee Communications Brochure*
Mergers & Acquisitions Brochure*

*For best viewing, make sure you have a recent version of Acrobat Reader.

Success Stories

Containing Costs

A municipal client faced a crisis. If 15 percent annual increases in health care costs continued, it would spend $51 million annually by 2011, an unsustainable amount. Lockton explained the benefits of a Consumer-Driven Health Plan, and the City agreed. Lockton and the Client effectively communicated the details and benefits of the new plan. The client also hired four on-site wellness coaches to provide a myriad of healthy lifestyle programs. Employees are now better-educated, more involved consumers whose actual cost share is less than it was four years ago. Total plan costs decreased and were held for a number of years. The employer then improved the benefits, which increased the cost slightly.
Retailer Achieves Savings Goal Through Renegotiation

Lockton Benefits was appointed broker for a firm that employees 7,000 people just two and half months prior to their January 2008 renewal date. The employer, one of the nations largest tool and equipment catalog retailers, owns more than 315 stores nationwide. Lockton needed to market, negotiate renewals, provide superior communication for open enrollment in December and save the client 10% of projected costs in 2007. By leveraging Lockton’s position with the incumbent carrier, Lockton renegotiated and restructured the financial agreement with the current carrier. This allowed the company to reach their savings goal on time. The renegotiated agreement earned the retailer a net savings of $900,000 for 2007. The new agreement is in place for 2008, with projections of similar savings.
Smoother Benefits Communication Flow Helps Dairy

One of the world’s largest marketers and distributors of dairy products struggled with the changing economy and an ineffective benefit program. The program, which was experiencing spiraling costs, suffered from a decentralized administration and a lack of communication with employees. The program was expensive and the employee’s did not understand what was available to them, which devalued the program. Lockton helped restructure the administrative side of the program, using a more centralized approach. Lockton also built a national road show with employees to better explain what was available to them. A new carrier was also found, resulting in a savings of more than $3 million dollars for 2009. The new plan and initiatives put in place have garnered high praise from both management and employees alike.
Eligibility Audits Drive Lower Benefit Costs

When a healthcare system faced significant healthcare cost increases, Lockton recommended a dependent eligibility audit as one strategy to solve the problem. The client agreed to conduct a comprehensive review of all spouses and children covered under its benefit programs. The client wanted to reduce future health plan costs as well as manage its fiduciary exposure and liability under the ERISA Exclusive Benefit Rule and limit Section 125 exposure. The 30-plus hospitals participating nationwide found that, on average, 12 percent of enrolled dependents were ineligible for healthcare benefits under the hospital’s guidelines. The client estimates first-year savings of $20 million while the ROI for this dependent eligibility audit is estimated between 500 percent and 1500 percent per hospital.
Digging for Ineligible Beneficiaries

A large mining company realized a need to reevaluate its benefits package, as it had gone unmonitored for an extended period of time. Lockton’s research revealed that employees received attractive benefits, but there needed to be a review of dependent eligibility. Lockton predicted several outcomes of the review before hiring a firm to conduct the review in a three-step process. The results of the dependent eligibility evaluation far exceeded the initial predictions, saving the company a projected $2.6 million and significantly decreasing its health care costs.
Making Benefits More Accessible

An international freight forwarding company employed a significant number of hourly-paid workers compared to salaried ones, but only offered a uniform benefits package that was more attractive to the salaried employees. After a program review, Lockton developed a more appropriate plan for the hourly workers by negotiating with the company’s insurer and reallocating a small government fringe rate to company-paid benefits, that they had previously received as part of their paycheck. Lockton’s work helped provide hundreds of employees with medical benefits, disability and life insurance and a pension program at a much more affordable rate, while saving the company $2.7 million in payroll taxes.
Adaptable Coverage for Globe-trotting Students

Lockton’s 15-plus year relationship with this public education client is characterized by program revisions and adaptability to students’ ever-changing needs. Approximately 7,500 students use the coverage program. In recent years, Lockton has revised coverage to reach students studying abroad. Lockton’s Benefits team implemented a search for vendors to assess and manage risk for students participating in study abroad programs. From there, the team created a product that could handle political or pandemic evacuations. Lockton’s ability to implement such programs is a product of their involvement on the various campuses and continued innovation for this longtime client.
Delivering a Restructured Benefit Program

The economy was punishing one of Lockton’s prospective clients, a big ticket consumer products delivery company. The costs of the firm’s benefits plan became an increasing concern for its leadership and its private equity owners. So the distributor needed an innovative solution.

Lockton conducted a review of the benefits program and the company’s business model. Lockton recommended a two-tiered benefit strategy, offering the company’s lower-earning employees a limited medical plan.

Lockton created a separate benefits classification for lower-earning employees, so they had basic coverage for day-to-day medical expenses, such as wellness visits. This allowed the client to move from a non-existent employee benefits program to half of the workforce with a limited medical plan.

Lockton’s plan reduced the premium increase from initial indications of a 12% increase to a 3% increase. This lower cost option also increased employee participation by 30%. These results and service exceeded client expectations.

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Employee Health & Welfare

Success Stories