Upon choosing Selectpath, we will provide a Value Audit of your current employee benefit program. This audit includes a comprehensive breakdown of retention costs, benchmarking of plan design and coverage to assess the competitiveness of your program in the marketplace. Once completed, you should have a much better understanding of how your program compares and the value it provides to both you and your employees.

Analysis of Retention and Underwriting Charges

Retention costs are simply the charges applied to your program by the insurance company. The charges include: general administration charges, claims administration charges, premium tax, profit charges and risk charges. Although some of these charges are bundled by insurers, we are able to expose these charges to you to determine competitiveness of the insurer. Underwriting charges are the inflation/trend, utilization and reserve charges applied to your program by the insurer. The reason to review these various charges is simple. If company A and company B are seen to offer comparable service and systems, it is most obvious to choose the insurer that offers the lowest retention and underwriting charges as your firm will save money each and every year.

The difference in retention charges also demonstrates the markets that the insurer is most interested in and efficient in. Being on the high or low end of a carrier’s threshold might make the retention charges uncompetitive versus the market place. When these charges are exposed, many companies question the value of their relationship with the insurance company.

The difference in underwriting charges can be a tell-tale sign of inefficiency or profitability of the insurer. As an example, if two insurers have trend for healthcare at 20% and 14%, your firm is being charged 6% more to adjudicate the same claims.

A thorough analysis of the various charges (by insurer) allows for a clear picture of where the insurer is competitive or uncompetitive. From the findings, we progress to the next area of the review.

Commission Audit:

Just as an insurer applies retention and underwriting charges to your program, they also add commission charges to the mix. Our commission audit unbundles these charges to expose the commission payable on the account. We then compare the charges with industry standards for the size of client and make recommendations on our findings.

Another area we focus on in our commission audit is the bonus payable by the current insurer. Many times, we find the carrier of choice being made as a result of the consultant’s requirement to justify a contract. At Selectpath, we also receive bonuses, but due to our volume of over 500 employee benefit programs, we have no pressures to comply with awarding a case for our betterment.