Small business adopts a level-funded health plan for reduced health care costs
A UnitedHealthcare Level Funded health plan helped Florida small business Rubber & Accessories manage costs without cutting benefits for its employees.
Based on a case study completed in 2023. Last updated November 5, 2024.
Building healthier businesses together with Rubber & Accessories
Dedication to employees fueled the need for change
Founded more than 50 years ago by Buzz Hooper and Harry Robb, Jr., industrial rubber business Rubber and Accessories was built on the belief that its employees were a major factor in the success of the company. Loyalty and a dedication to values of ethics, service and reliability have helped Rubber and Accessories maintain a stellar, industry-wide reputation.
Although the landscape has evolved throughout the years, Founder and President Buzz Hooper says that “the way we operate, the way we relate to customers, employees and suppliers hasn’t changed.” In fact, “as soon as we started hiring, we started offering health benefits.”
In 2020, facing the COVID-19 pandemic and other challenges, Rubber & Accessories was looking at a 14% increase in premiums with its previous health insurer. Benefits are already a major expense for small businesses like theirs, typically coming in second on the budget after salaries and wages.1 "We try to keep our employees’ costs as low as possible, as long as our costs are stabilized," Hooper said.
To help control rising health care expenses without passing costs to employees, Rubber & Accessories moved from a fully insured plan to a UnitedHealthcare Level Funded plan.
A strategic approach to cost management
In addition to the level-funded plan’s lower monthly fixed payments, the company was intrigued by the potential year-end surplus refund if its medical and pharmacy claims end up lower than expected.2
The plan also includes monthly reports that employers can use to track claims trends, network use and wellness program participation. These reports gave Rubber & Accessories visibility into whether its employees were utilizing health services and how likely they were to receive a surplus refund.
"We know the status of the surplus each month when we get the report," Hooper said. "It gives us a reason to take a look and see where we’re standing, but I try not to make rash decisions based on the data."
To Hooper’s surprise, the company has received a 16% average surplus refund based on annual premiums paid over its 2 years with a UnitedHealthcare Level Funded plan. "Receiving a surplus refund has made it easier to justify not increasing my employees’ health care contributions and covering 70% of their costs," Hooper added.
Hooper attributes the stabilization of his company’s costs to the level-funded plan and the collaborative and trusted relationship he has with his broker and UnitedHealthcare.
"Switching from a fully insured plan to a UnitedHealthcare Level Funded plan has allowed me to focus on running my business, because I know that my costs are stable and my employees are getting a quality health plan at an affordable cost."
Delivering value to employees
On top of the potential cost savings level-funded plans offer, Rubber & Accessories was drawn to the reputation UnitedHealthcare carried and its large provider network, including 1.6M+ physicians and health care professionals and 6K+ hospitals.3
"Cost is a big part, but the reputation of UnitedHealthcare in this market area is very good,” Hooper said. “A lot of providers in this area recognize and accept UnitedHealthcare, so it was a no-brainer."
Networks that give employees access to a wide range of providers deliver both better health outcomes and lower costs. According to research, members who engaged with a PCP had 10% lower costs than those who didn’t, due in part to better health choices, such as seeking care at a clinic instead of an ER, filling and taking medications as prescribed and getting recommended preventive screenings.4
"The transition from a fully insured to a level-funded plan was pretty seamless for our employees, and the sentiment as a result has been a lot more positive over the last 2 years than with our previous health plan," said Hooper.
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