AMHIC, A Reciprocal Association

CASE STUDY: Large Self-Funded Group

THE PROBLEM: Before choosing AMHIC, this local research organization with 250 employees faced three critical issues with their self-funded insurance program. First, their employees were experiencing customer-service problems. Second, the administrative demands of self-funding were becoming critically complex, threatening to overwhelm the organization’s small Human Resources staff. Third, whenever they had large medical claims, they worried about cost volatility. To return to a fully insured status seemed like a solution worth investigating in earnest.

THE SOLUTION: The organization asked their insurance broker to help them identify suitable fully insured alternatives. By choosing AMHIC, the organization discovered they could retain multiple plan options and coverage, as well as the ability to customize eligibility definitions. AMHIC also offered friendly third-party administration (TPA) claims processing and cost transparency. Because AMHIC spread the organization’s insurance risk among 45 other employers, the organization no longer had to worry about maintaining reserves, funding daily claims, negotiating renewals with multiple vendors, or developing plan summaries and booklets inherent in self- funded arrangements.

Choosing AMHIC led to two unexpected outcomes for the organization. First, because AMHIC does not pay commissions, the organization chose to pay their broker a consulting fee for bringing them a valuable solution. Second, they offset this unanticipated cost by offering more PPO network choices to their employees and reducing their FASB 106 post-retirement health liability from their financial statements.

CASE STUDY: Small Interstate Group with PPO Medical Plan

THE PROBLEM: A small not-for-profit organization with 30 employees located in several different states had offered a rich PPO medical plan with the same national carrier for over 30 years, but its richness of choice was turning out to be expensive. Younger, lower paid employees wanted a less expensive alternative such as an HMO, but older employees wanted to retain the choice of doctors and extensive benefits coverage of the original PPO plan. The organization’s insurance broker found some alternative insurers that offered dual-option plans (both an HMO and PPO), but these insurance companies did not have a national network that fit the organization’s needs.

THE SOLUTION: AMHIC's multiple networks included the same PPO network the organization had been offering, plus others they did not have before. AMHIC’s Kaiser Permanente Select HMO plan offered the low-cost alternative their employees desired.

While the AMHIC PPO plan had higher deductibles and co-pays than the organization’s current plan, this cost increase was offset by AMHIC’s rich array of new benefits (dental, life insurance, vision, legal, employee assistance program (EAP), and flexible spending account (FSA) administration). Lower AMHIC premiums allowed the employer to decrease employee contributions to the medical plans, which also offset the employees’ higher out- of-pocket costs of the AMHIC PPO plan.

CASE STUDY: Small Group with HMO Medical Plan

THE PROBLEM: A small employer with five employees was insured by a regional HMO. In order to maximize the organization’s ability to recruit and retain top talent, the employer wanted to strengthen its benefit offerings by adding a PPO plan. But PPO costs were much higher than anticipated, and would result in either significantly higher employer costs, or major disruption to existing employees who would be required to change plans.

THE SOLUTION: By choosing AMHIC, the employer was able to replace its plan with a multi-option program. Though AMHIC’s premiums were higher than the existing plan, the employer was able to maintain existing costs by setting a fixed premium contribution for employees across all plans and letting each employee choose which premium and plan he or she wanted.

The employees were pleased with the AMHIC plans because they had more choices and could maintain a similar payroll deduction by choosing AMHIC’s lower cost HMO option. The organization was happy because these increased benefits helped them recruit a highly seasoned executive who wanted the freedom of choice offered by a PPO plan. In addition, the organization was able to offer retiree coverage, to its employees, since AMHIC allows employers to insure retirees. The plan fit both the culture of the organization and its long-term strategy of attracting and retaining highly qualified employees.