Lancaster County (PA) - With close to 15 years experience working with municipalities to jointly purchase health care benefits, The Benecon Group took the concept a giant step forward by banding four of its existing municipal co-ops into a separate umbrella group called PMHIC (PA Municipal Health Insurance Cooperative). Initially, PHMIC was formed in January of 2005 to enable members to aggregate dental and vision insurance on a global basis.
The real savings, however, are kicking in this year as PMHIC members renew their existing health insurance programs. Instead of annual increases that were coming in as high as 20 to 30% under their traditional plans, the switch to Benecon's modified self-funding program is producing an average 3.4% increase over last year's total insurance costs. One member actually saw a rate decrease. By the end of the year, annual savings for each co-op in PMHIC could range from several hundred thousand to over a million dollars-money that can be used for other municipal projects that benefit taxpayers.
Bob Anckaitis, Manager of Palmer Twp. that is part of the Lehigh Valley Insurance Cooperative (LVIC), is ecstatic about the new PMHIC program. "It's our first year for self-funding, and based on our known costs for next year, our (2006) health insurance is only increasing about 1% versus 2005. That's absolutely incredible. We are saving Palmer Twp. a lot of money compared to any plan we would have had to purchase on our own. . .even more so with self-funding." Said Benecon CEO Sam Lombardo, "Benecon was able to create a workable self-funding approach by utilizing years of data collection experience with all of our member co-ops. Our Actuarial Division is able to show members where their health insurance premiums go and can offer illustrations of fully insured annual premium breakdowns."
The PHMIC umbrella co-op offers numerous advantages, from greater price predictability and stability to the actual control of benefit options that comes with increased market clout and leveraging. It also made volume discounts a possibility, and opened the door to self-funding arrangements. At the end of the year, if a PHMIC co-op member has a good claims experience, it is the municipality that retains the surplus. Tack on the savings experienced up front with reduced renewal costs, it's a win-win for the municipality, its employees who enjoy the same health benefits at a better cost, and the taxpayers at large. "That's exactly what's happening in Gettysburg." Explains retiring Borough Manager Charlie Sterner, "We've been part of the Capital Region Insurance Trust (CRIT) for about three years, and have watched our rates increase 15-20%-a lot less than increases other municipalities have been experiencing. With self-funding, our rates decreased 3.4% in 2006. We saved an immediate $21,000 at renewal, and depending on claims, we could save another $94,000 this year. In 2005, our total fixed costs for health benefits was $608,000. In 2006, the total is $587,000. That's good money being saved for the tax payers of Gettysburg."
The concept has been so successful The Benecon Group is now introducing it to other markets. In March of this year, a fifth Central Region Insurance Cooperative has been incorporated into the PMHIC umbrella, bringing the total number of municipalities served to 91 in 16 counties across the Commonwealth.
Incorporated in 1997, The Benecon Group is a one-stop source for the ever-increasing array of expertise large employers need to devise employee benefit plans that satisfy their own strategic needs, government requirements, and the personal needs of employees. In addition to creating five very specialized service divisions, Benecon has also built a network of over 300 independent insurance agents and brokers. Benecon holds Preferred Broker status with Capital BlueCross and Highmark Blue Shield, and is a general agent for HealthAmerica and Geisinger Health Plan.
Back to Press Room |