Background
In 1996, Benecon began working with Schoeneman Corporation, a fourth generation beauty supply company located in Pottsville, Pennsylvania. The Schoeneman Corporation has been serving professional cosmetologists, estheticians and licensed nail technicians by offering reliable service, innovative products and tools, and education for over 65 years.
The Schoeneman Corporation receives their medical benefits through Capital BlueCross and has a funding arrangement known as retro refund. The retro refund arrangement generates a financial settlement provided to the client approximately four months after year end. Using a universal formula, Capital BlueCross calculates a surplus or deficit amount which is reflected on the financial settlement.
Situation
At the time the Schoeneman Company’s settlement was evaluated, Capital BlueCross determined that Schoeneman was in a deficit position totaling over $1.3 million. The significant deficit was extremely troubling to the Company and they asked their employee benefits consulting experts, The Benecon Group, to intervene and review the settlement process in its entirety.
Action
Benecon reviewed Schoeneman’s settlement and, based on the results of the analysis, requested Capital BlueCross to re-evaluate the entire deficit scenario. The request was predicated on the fact that Benecon identified several large dollar claims which were anomalies and were major factors in arriving at the large deficit. Benecon, utilizing its actuarial expertise, recommended that Capital BlueCross eliminate the anomalies and re-calculate the deficit. Capital BlueCross agreed to do so.
Result
The result of the re-calculation was astounding. The projected deficit was reduced from $1.3 million to $155,000. Acting as the client advocate and exploiting its actuarial expertise and excellent carrier relationships, Benecon was able to save the Schoeneman Corporation over $1 million. Today, The Schoeneman Corporation is thriving and the Benecon Group continues to assist them in benefit design and management of their health care expenditures.
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