Case Study

A Second Opinion Pays Off Big

Rooted in its ongoing client partnership, Banyan was engaged by a 14,000-employee health system located in Central Pennsylvania to devise and construct a contemporary cafeteria program design for employee benefits delivery. Paramount in this process was a detailed review of the longstanding vendor relationships concerning life and disability insurance and their role in the overall program design. Although ongoing downward pricing trends had been experienced with the incumbent carrier, Banyan recommended that prevailing market conditions created opportunities for additional service enhancements and pricing concessions in 2009.

As a result of its due diligence and full marketing process through Banyan, the health system realized $560,000 in annualized premium savings on the basic life coverage, and $540,000 for the supplemental program. Banyan also negotiated with the selected carrier to increase the supplemental life maximum from a multiple of two times salary to six times salary— increasing the capped maximum from $350,000 to $1,500,000 in potential supplemental life insurance for each employee. The rate guarantee for this revised life insurance program is 4 years.

The client’s disability program is complex because it incorporates five classes that receive varying levels of benefits. After a productive marketing process, Banyan secured reductions in premium from the incumbent carrier significantly eroding annualized premium figures by nearly $570,000.  As a result, the inforce rate guarantee was extended by an additional three years. Beyond enhancing these specific lines, Banyan succeeded in delivering annualized savings of more than $1.6M on these benefits alone.