California Construction Company Improves Health Benefits and Lowers Insurance Expenses by $215,000 – Guaranteed
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A corporate construction services company with three locations across California recently faced a difficult renewal: a 10% health insurance rate increase from long-time carrier Kaiser Permanente. With more than 300 employees enrolled on their plan, the renewal would have pushed their annual healthcare spend above $4 million - unless they acted decisively.
The Challenge: Rising Costs and Complex Plan Designs
This employer was operating several complicated Kaiser plan designs, creating confusion for employees and administrative strain for HR. The executive team turned to their trusted advisor at Alliant Insurance Services, asking for a solution that would both simplify their benefits and reduce overall healthcare costs.
The Strategy: Leveraging Alliant’s Expertise and the MERP Advantage
After marketing the plan and evaluating various healthcare cost containment solutions, the Alliant consulting team partnered with The Difference Card to build a customized strategy. As an Elite Purple Producer, Alliant had extensive experience using the Medical Expense Reimbursement Plan (MERP) strategy to help similar employers reduce costs while maintaining strong benefits.
Together, Alliant and The Difference Card crafted a solution that allowed the employer to:
- Keep Kaiser Permanente as their health plan and provider network
- Avoid employee disruption by maintaining familiar doctors and facilities
- Shift to a higher-deductible plan priced collaboratively with Kaiser, reducing fixed premiums by over $1.3 million
The Solution: Simplified Benefits and Enhanced Employee Coverage
Once the new plan structure was selected, both teams designed a custom MERP funding arrangement to improve coverage for employees while streamlining the benefit offering into a simplified, easy-to-understand plan design.
Despite the higher-deductible base plan, employees actually experienced lower out-of-pocket costs thanks to the MERP strategy—delivering better coverage and a more user-friendly benefits experience.
The Difference Guarantee: Budget Certainty and $215,000 in Savings
To protect against utilization volatility, the employer selected the Monthly Budget feature of the Difference Guarantee. This guaranteed:
- At least $215,000 in annual savings on their healthcare spend
- A firm cap on MERP reimbursement liability
- 100% of any future surplus returned directly to the employer
Based on expected performance, the company anticipates over $200,000 in additional surplus savings—further accelerating their financial gains.
A Proven Approach to Healthcare Cost Containment
At The Difference Card, we specialize in healthcare cost containment strategies that empower employers to reduce rising health insurance expenses without compromising employee benefits. Through innovative tools such as our MERP strategy and the Difference Guarantee, construction companies nationwide are learning how to take control of their healthcare spend—so they can focus on building great projects and supporting their people.
💡 Want to learn how we can help your clients save money and enhance employee benefits through proven healthcare cost containment strategies?👉 Contact us today!
