New York Nonprofit Reduces Health Insurance Costs by $130,000 Guaranteed with The Difference Card PLUM Solution
Key Takeaways A Quick Summary
Key Takeaways
- A nonprofit in Upper Manhattan faced a 16% health insurance renewal increase for 125 employees, which would raise annual healthcare spend to over $3.7 million—unsustainable on a fixed funding budget.
- FRP’s market review found no competitive carriers willing to offer meaningful relief due to the organization’s high claims-to-premium ratio, and the employer would not shift costs to employees.
- FRP engaged Richard Halpin/The Difference Card and implemented the PLUM (Provider Look Up Manager) solution to steer members to high-quality, cost-effective providers.
- A coordinated approach combined a more cost-effective base plan (reducing the projected renewal by nearly $300,000) with The Difference Card MERP, which reimburses deductible differences only when members use PLUM-designated providers.
- Results included a guaranteed $130,000 in net savings, no reduction in benefits or increase in employee contributions, potential upside via a 100% surplus return (Difference Guarantee), and predictable level-funded cash flow through a Monthly Budget feature.
A nonprofit social services organization located in Upper Manhattan was facing a significant financial challenge after receiving a 16% health insurance renewal increase from its incumbent carrier. With 125 employees enrolled, the increase would have driven the organization’s annual healthcare spend to more than $3.7 million, an unsustainable outcome for an employer operating within a fixed funding budget.
Recognizing the urgency of the situation, the nonprofit turned to its trusted advisor at Foundation Risk Partners (FRP) to explore cost-containment strategies that would not compromise employee benefits or increase employee contributions.
Finding a Solution in a Difficult Market
The FRP brokerage team conducted a thorough market review and evaluated alternative plan options. However, due to the organization’s high claims-to-premium ratio, no competitive carriers were willing to offer meaningful rate relief. Additionally, the employer made it clear that shifting costs to employees through higher deductibles or contributions was not an option.
To address these constraints, the FRP team engaged Richard Halpin from The Difference Card’s New York consulting team to design a more strategic solution.
Introducing the PLUM Strategy
Richard proposed the use of Provider Look Up Manager (PLUM); an innovative Difference Card solution that helps steer members toward high-quality, cost-effective healthcare providers. The PLUM database evaluates providers based on cost, quality, and clinical effectiveness, awarding top performers with a PLUM designation.
These PLUM designated providers were then integrated with The Difference Card Medical Expense Reimbursement Plan (MERP) strategy, creating a powerful incentive structure that aligns smarter provider utilization with meaningful cost savings.
Coordinated Plan Design + MERP Execution
Working collaboratively with the carrier, the FRP team secured a more cost-effective base plan design, reducing the projected renewal increase by nearly $300,000. The Difference Card MERP was then strategically layered to reimburse deductible differences only when members utilized PLUM designated providers, ensuring cost savings without sacrificing access or care quality.
The Results:
- $130,000 in net savings guaranteed
- No reduction in benefits or increase in employee contributions
- Additional upside potential through The Difference Guarantee’s 100% surplus return
- Predictable cash flow through the Monthly Budget feature, providing a level-funded payment structure to simplify administration and budgeting
A Proven Approach to Healthcare Cost Containment
At The Difference Card, we specialize in healthcare cost containment strategies that help employers, especially nonprofits and mission-driven organizations take control of rising healthcare expenses without compromising the well-being of their employees. Through innovative solutions like PLUM, MERP, and the Difference Guarantee, employers can achieve measurable savings, predictable budgets, and long-term sustainability.
