2017 Power Broker

Employee Benefits

A Knack for Finding Unexpected Savings

John Byers
Vice President
Aon, Franklin, Tenn.

One of John Byers’ clients had been going directly to a carrier for its elective benefits, but the outdated strategy caused its employees to pay up to four times the market price for an inferior product.

Byers, who is also director of sales, and his Aon team were able to save them an average of 35 percent on premiums while improving benefits by 50 percent. The broker also negotiated three additional benefits: telehealth services, employee advocacy and medical bill saver.

A new client told Byers that it had received a 49 percent increase on its medical plan. Byers and his team redesigned the plan, increasing the deductible of the primary coverage and subsidizing the difference with a secondary carrier, saving the client nearly $1 million.

One employee had her out-of-pocket costs for maternity care cut from $4,100 to $1,000, and 80 percent of employees spent nothing more than their premium contributions on their medical costs in 2016.

“I think John does a better job asking questions that really get to the heart of the issue, helping those clients that I work with save in places that they didn’t even think they could,” said Colby Jubenville, senior consultant at Brent Consulting Group. “Secondly, he helps them manage risk in ways in ways they didn’t think was possible.”

“John is really a great guy to work with,” said a benefits director at a restaurant company. “He has the company and the employees’ best interests at heart, and he does a really good job in our space.”

Solid Strategies for Global Challenges

Jeff Clymer, FSA, MAAA, EA
Senior Partner
Aon, Waltham, Mass.

One of Jeff Clymer’s clients recently separated from a large U.S. company and needed to create new global retirement plans. The challenge was meeting certain financial objectives in the allocation of unfunded pension liabilities across over 100 pension plans in over 25 countries. The solutions had to vary by country and the concentration of employees in each country.

Specific challenges included legal restrictions; assets that couldn’t be transferred between plans; defined benefit plans that couldn’t be efficiently provided; and new funding vehicles that had to be established.


Where defined benefit plans could not be efficiently delivered, Clymer and his team developed alternative arrangements to deliver comparable benefits. When future benefits were provided as defined contribution, the defined benefit obligations were not shifted to the new company. Due to the design of these plans and the various stakeholders involved, there were many challenges as the team balanced cost with acceptance of the new designs.

“This was a huge effort … and Jeff’s expertise and knowledge was instrumental in ensuring we met critical deliverables and milestones in record time,” said the client’s director of compensation and benefits.

“Jeff has the ability to help us strategize, work through the business transition that we’re doing throughout the organization, how that impacts our employees, presenting options we could take to mitigate that,” said the client’s VP, global benefits and employee mobility.

Tops at Turning Rate Trends Around

Joseph Colombo
Area Vice President
Arthur J. Gallagher, Princeton, N.J.

Colombo worked to create two self-funded programs for his clients: the N.J. RX Shared Services Program and the N.J. Dental Shared Service Programs. Clients’ percentage rate increases in the N.J. RX Shared Services Program fell to single digits, even below forecasts.

By joining the  NJ Dental Shared Service program, all groups reduced administrative expenses by 30 percent. This program also implemented a transparent three-tier provider network that reduced claim expenses by 15 percent to 20 percent. The three-tier network is unique to the program and was not offered to the school boards in previous years.

“I’m thrilled with the services provided by Joseph Colombo,” said a board secretary and business administrator at a K-12 school district. “He does an excellent job negotiating renewal rates with the carriers on our behalf. During our collective bargaining, Mr. Colombo provided the board numerous alternative strategies to introduce what would help the district reduce their health insurance costs.”

“He’s very attentive to clients’ demands,” said Derek Jess, board secretary and business administrator at Perth Amboy Board of Education. “He and his team have always provided great service and he always makes sure the client gets the best possible rate for their insurance benefits.”

Guiding Clients Toward a Better Path

Lori DeVore, FSA, EA
Aon, Columbus, Ohio

A restaurant client of Lori DeVore wanted to move from a 100 percent employer-paid retirement benefits program to a culture where employees share the responsibility of saving for retirement.

Through the use of a new 401(k) plan, a new nonqualified supplemental executive retirement plan, and the existing profit-sharing plan to provide five years of bridge benefits to qualifying employees, DeVore and her team were able to achieve the client’s goal of reduced and predictable cost, and an average benefit replacement level of 90 percent or more for employees who participate fully in the new 401(k) plan.

A prospect in the health care industry was funding its three pension plans at the minimum required level. This allowed the prospect to utilize its cash resources in other parts of its business, but it resulted in underfunded pension plans and large required premiums to the Pension Benefit Guaranty Corp. DeVore showed the organization that it could lower overall costs and increase cash flow if it borrowed money to fully fund the plans immediately instead of contributing only the minimum required contributions. The prospect hired Aon and is currently seeking loans to fully fund the pension plans.

“Lori DeVore is one of the most dedicated representatives that we have ever worked with,” said Nina Maratto, director of benefits at White Castle Systems Inc. “She is accurate and consistent, and we can rely on her without fail. She knows parts of our benefit plans better than we do; she truly is an extended member of our team.”

Better Solutions for Maritime Challenges

Dale Finn, CHRS, CWS
Area Senior Vice President
Arthur J. Gallagher, West Palm Beach, Fla.

Dale Finn’s cruise line clients are required to comply with challenging maritime regulations regarding medical treatment for employees.

For example, if crew members need offsite medical attention in a country of which they are not a citizen, they must be met at the port-of-call with an armed guard and provide a visa letter to be escorted off the boat and treated. Cruise lines also must completely cover any care over a certain threshold, other than pre-existing conditions.

For Royal Caribbean International, Finn negotiated modifications to in-network coverage to limit care only to providers that met specific cost and quality-of-care guidelines. He also arranged for care and medical housing for non-U.S. citizen crewmembers’ families in locations around the United States, eliminated duplicate billing, and ensured the publicly traded company would receive claims reports weekly.

Overall, these changes resulted in $2 million in savings.

“Dale has been very consistent in facilitating significant contractual arrangements we have with UnitedHealthcare Global,” said Lee Thomassen, senior director, health administration, health services, at Holland America Group. “Dale provides reliable and objective information regarding what might or might not affect our business initiatives. He has a high level of integrity — he has been first-rate in following up on issues.”

“Dale is extremely knowledgeable in his field,” said the assistant general counsel of a cruise line. “Whenever we have questions, he has answers.”

Sharing a Vast Wealth of Knowledge

Karin Landry, CEBS, ACI, CLTC, GBA
Managing Partner
Spring Consulting, Boston

Karin Landry worked with the Labor Department last year to get clients’ ERISA-prohibited transaction exemptions (PTE) approved and re-establish the expedited process for securing a PTE.

Additionally, Landry oversaw a comprehensive research project focused on the evolution of each benefit captive and the lessons learned by the employers as they went through the process, implementation and maturity of the captive.

Landry subsequently penned a white paper about the results and gave a number of speeches globally about her findings. The project demonstrates to employers that captive funding of ERISA-covered benefits is more attainable than they may have thought.

Last year, Landry also authored a comprehensive chapter on employee benefit funding for the American Bar Association for its upcoming member resource on captives, as well as a “Captives 101” book and other white papers covering self-funding risk, medical stop loss in captives, captives for mid-sized businesses and cell captives.

Landry is a professor of employee benefits and a member of the finance committee for International Center for Captive Insurance Education at the University of Vermont.

“Karin Landry and her team have provided superior service to me and my company,” said the manager of risk financing at a business travel and meeting management firm. “Karin is an expert in her field and her expertise proved vital to the success of our insurance program.”

From Complicated to Mission Accomplished

Barbara Ludwig
Managing Director
Crystal & Company, New York

One of Barbara Ludwig’s clients was merging with a large national company with a different health care program.

The client had one consumer-directed plan with a health reimbursement plan, with high employee participation and salary-based contributions. The national company had five medical plans, including a CDHP/HSA with almost no participation, and various contribution strategies. Ludwig and her team helped restructure contributions and the plan was simplified on a national level as a dual-option program, which included a CDHP/HSA — resulting in more than $400,000 in savings for the client.

For a private equity client, Ludwig and her team were tasked with setting up a benefits package for a company the firm was acquiring — without any claims information, just a census. She was forbidden from communicating with the seller’s employees until after the close of the deal, the day before benefits had to take effect.

Ludwig partnered with the PE firm and seller to gain an understanding of the employee population and factors that could affect the program and coverage. Ultimately, she was able to secure a comprehensive benefits program that met the client’s financial objectives.

“She goes above and beyond, getting back to me with follow-up on total business requirements, even though she doesn’t have to,” said a director of a medical management company. “She has excellent rapport with her clients and she does her job well. She’s got great initiative, great expertise and ideas — she has saved our company a lot of money.”

Pioneering Exceptional Savings

Dan McFall, FSA, MAAA
Aon, Lincolnshire, Ill.

Dan McFall invented the “spot rate” method for pension and retiree medical accounting, which gives a more precise measure of interest and service costs by applying the specific spot discount rates along the yield curve used to determine the benefit obligations to relevant projected cash outflows.

The SEC confirmed the use of the spot rate method for companies that use a yield curve to select their traditional discount rates assumption, and companies are now seeing roughly a 15 percent to 20 percent reduction in their interest and service costs. For some large organizations, 2016 expense reduction is in the tens of millions or even hundreds of millions of dollars.


“Adoption of the new methodology resulted in a savings to our P&L in excess of $2 million in the year of adoption, and it will continue to yield annual savings for us on an ongoing basis as well,” said one client’s vice president of internal audit.

“Two words that describe Dan are ‘extraordinarily innovative,’ ” said James Beckert, executive director, pensions and benefits, at Verizon Communications. “Dan has multiple clients in different industries but remains an expert in mine, keeping abreast of changes in law, politics, accounting and, of course, actuarial sciences that could impact my company.”

“Dan helps us identify opportunities, regulatory changes, and provides clear counsel on changing industry trends,” said an accounting manager at an equipment manufacturing company. “We view Dan as a great partner.”

Keeping Clients’ Best Interests at Heart

Carol Morgan
Area Vice President
Arthur J. Gallagher, Springfield, Mo.

Carol Morgan co-administers the Missouri Educators’ Trust, a self-insured employee benefits trust for participating Missouri school districts. Eighty school districts are trust members, 11 of which were acquired in 2016. While many Missouri school districts have seen large, even double-digit, medical renewal increases in recent years, the trust saw only a 1.3 percent medical renewal increase for 2015-2016, no increase for 2016-2017, and boasts roughly $15 million in reserves.

“She is a retired educator, so she has a better understanding of our organization,” said Phil Cook, superintendent of Carl Junction R-I School District. “We formed a trust in the state of Missouri and she has been the broker who has put that thing together.

“She is so thorough and if you have questions, she is going to get back to you quickly with answers. She is one go-getter, and very approachable in this area.”

Added Michael Mason, superintendent of the Reeds Spring R-IV School District: “Carol Morgan always has the client’s best interests at heart. For her (and co-administrator Doug Jenkins) it’s not about how much money they can make by trying to push products that aren’t necessary.”

“She’s my go-to person whenever I have a potential claim or need to add a client,” said Roger Barnes, superintendent of the Chillicothe R-II School District. “She’s very responsive — her level of customer service is exceptional.”

Delivering a Holistic Approach to Success

Jim Patton
Area Vice President, Western PA
Arthur J. Gallagher, Pittsburgh

To get NFP Broadcasting’s medical plan renewal increase from 35 percent to 10 percent, Jim Patton collaborated with the carrier to find cost savings, such as allowing infusion therapy to be administered at home. He also negotiated discounts for using facilities other than hospitals for imaging, diagnostics and lab work.

Patton convinced NFP to invest in wellness, and also recommended a spousal exclusion rule. Moreover, employees who completed wellness initiatives and were tobacco-free were able to get a plan equal to what they paid in 2016.

“Jim has earned the trust of our senior leadership team by delivering accurate cost projections within our defined budget and leveraging his book of business and relationships with the carriers to get us the best deals possible and competitive benefit offerings for our employees,” said Lynda Wilkes, NEP’s senior vice president, human resources.

“Not only does Jim have the executive presence and perspective, but he is also able to work effectively with my team and has a great relationship with one of the largest health insurers in the Western Pennsylvania market — which allows him to be effective in negotiations,” said Patrick Rooney, chief financial officer at Net Health.

“Jim stressed that our leadership should be 100 percent behind health and wellness and all of the initiatives done with our vendors and partners,” said Brian Llewellyn, director of human resources at Concordia Lutheran Ministries. “By improving these relationships, it’s helped to negotiate better costs and concessions.”

A Win-Win for Clients and Employees Alike

Robert Petcove
Area Vice President
Arthur J. Gallagher, Mount Laurel, N.J.

Cross Media Works’ fully insured medical plan was facing an 18.5 percent increase for 2016, at the same time the company was tasked with bringing together different benefit programs and contribution philosophies after acquiring another firm.

Robert Petcove and his team recommended a self-funded solution and an alignment of the medical plan programs. The West Coast operation used nine plan designs, while the East Coast operation had one — and neither had a high-deductible health plan. The company chose two plan options with lowered employer contributions: a PPO and an HDHP with a health reimbursement account.

Petcove and his team also helped the company implement vision, dental, group life, disability and telemedicine. Cross Media is now working on a wellness strategy that supports employee physical health, financial health, career health and community health.

The company is projecting up to 10 percent in premium savings for the year, and even more in 2017.

“Rob has saved my company a tremendous amount of money,” said CFO Jonathan Batt. “The company can now control the rising costs of health care to its employees by passing some of those savings back to them.”

“We get nothing less than 24/7 deliverables from Robert,” said Charles Sidner, vice president, corporate benefits, at Penske Automotive Group Inc. “He and his team have not let us down and they are a pleasure to work with.”

Beating the Odds

Courtney Touw, CEBS
Executive Vice President of Sales
Alliant, Seattle

The Anchorage School District’s load for health care is roughly $19,000 annually, which exceeds the income of many employees.

Courtney Touw and his team have defied the odds and held ASD’s medical spend to below 4.5 percent, a third of Alaska’s average of roughly 13.5 percent.

Central to this success is the creation of a no-cost primary care network, which will open in 2017, with convenient locations, same-day or next-day appointments, health coaching and telemedicine. Touw and his team also created health care referral networks to encourage and pay for travel to the lower 48 states, where procedures are one-third the cost with significantly higher-quality results.

As a result of the team’s efforts, delivery of primary and preventive care increased 37 percent, employee out-of-pocket costs fell 20 percent and renewals were down 5.5 percent.

“It’s been a pleasure to work with him,” said Mike Dinges, the district’s executive director of contract administration.

“Courtney and his team provide superior customer service,” said Ron McFadden, chief financial officer of Zones Inc.

“He helped us navigate the Affordable Care Act and has done so deftly. He worked with us on plan design to reduce costs without impacting the quality or integrity of the benefit offerings to our team members. He provides solutions and constantly introduces innovative ideas to drive down costs.”


Richard Carr
Senior Vice President
AssuredPartners NL, Richmond, KY

Cecille Feliciano
Managing Director
Crystal & Company, Los Angeles

Michael Menerey
Senior Vice President
Alliant Insurance Services, Inc., Los Angeles


Jeff Ries
Area Vice President
Arthur J. Gallagher & Co., Charlotte, NC

Curt Young
Senior Director Defined Contribution
Aon, Charlotte, NC

More from Risk & Insurance

More from Risk & Insurance

High Net Worth

High Net Worth Clients Live in CAT Zones. Here’s What Their Resiliency Plan Should Include

Having a resiliency plan and practicing it can make all the difference in a disaster.
By: | September 14, 2018 • 7 min read

Packed with state-of-the-art electronics, priceless collections and high-end furnishings, and situated in scenic, often remote locations, the dwellings of high net worth individuals and families pose particular challenges when it comes to disaster resiliency. But help is on the way.


Armed with loss data, innovative new programs, technological advances, and a growing army of niche service-providers aimed at addressing an astonishingly diverse set of risks, insurers are increasingly determined to not just insure against their high net worth clients’ losses, but to prevent them.

Insurers have long been proactive in risk mitigation, but increasingly, after the recent surge in wildfire and storm losses, insureds are now, too.

“Before, insurance was considered the only step in risk management. Now, our client families realize it is one of the many imperative steps in an effective risk management strategy,” said Laura Sherman, founding partner at Baldwin Krystyn Sherman Partners.

And especially in the high net worth space, preventing that loss is vastly preferable to a payout, for insurers and insureds alike.

“If insurers can preserve even one house that’s 10 or 20 or 40 million dollars … whatever they have spent in a year is money well spent. Plus they’ve saved this important asset for the client,” said Bruce Gendelman, chairman and founder Bruce Gendelman Insurance Services.

High Net Worth Vulnerabilities

Laura Sherman, founding partner, Baldwin Krystyn Sherman Partners

As the number and size of luxury homes built in vulnerable areas has increased, so has the frequency and magnitude of extreme weather events, including hurricanes, harsh cold and winter storms, and wildfires.

“There is a growing desire to inhabit this riskier terrain,” said Jason Metzger, SVP Risk Management, PURE group of insurance companies. “In the western states alone, a little over a million homes are highly vulnerable to wildfires because of their proximity to forests that are fuller of fuel than they have been in years past.”

Such homes are often filled with expensive artwork and collections, from fine wine to rare books to couture to automobiles, each presenting unique challenges. The homes themselves present other vulnerabilities.

“Larger, more sophisticated homes are bristling with more technology than ever,” said Stephen Poux, SVP and head of Risk Management Services and Loss Prevention for AIG’s Private Client Group.

“A lightning strike can trash every electronic in the home.”

Niche Service Providers

A variety of niche service providers are stepping forward to help.

Secure facilities provide hurricane-proof, wildfire-proof off-site storage for artwork, antiques, and all manner of collectibles for seasonal or rotating storage, as well as ahead of impending disasters.

Other companies help manage such collections — a substantial challenge anytime, but especially during a crisis.

“Knowing where it is, is a huge part of mitigating the risk,” said Eric Kahan, founder of Collector Systems, a cloud-based collection management company that allows collectors to monitor their collections during loans to museums, transit between homes, or evacuation to secure storage.

“Before, insurance was considered the only step in risk management. Now, our client families realize it is one of the many imperative steps in an effective risk management strategy.” — Laura Sherman, founding partner, Baldwin Krystyn Sherman Partners

Insurers also employ specialists in-house. AIG employs four art curators who advise clients on how to protect and preserve their art collections.

Perhaps the best known and most striking example of this kind of direct insurer involvement are the fire teams insurers retain or employ to monitor fires and even spray retardant or water on threatened properties.

High-Level Service for High Net Worth

All high net worth carriers have programs that leverage expertise, loss data, and relationships with vendors to help clients avoid and recover from losses, employing the highest levels of customer service to accomplish this as unobtrusively as possible.

“What allows you to do your job best is when you develop that relationship with a client, where it’s the same people that are interacting with them on every front for their risk management,” said Steve Bitterman, chief risk services officer for Vault Insurance.

Site visits are an essential first step, allowing insurers to assess risks, make recommendations to reduce them, and establish plans in the event of a disaster.

“When you’re in a catastrophic situation, it’s high stress, time is of the essence, and people forget things,” said Sherman. “Having a written plan in place is paramount to success.”


Another important component is knowing who will execute that plan in homes that are often unoccupied.

Domestic staff may lack the knowledge or authority to protect the homeowner’s assets, and during a disaster may be distracted dealing with threats to their own homes and families. Adequate planning includes ensuring that whoever is responsible has the training and authority to execute the plan.

Evaluating New Technology

Insurers use technologies like GPS and satellite imagery to determine which homes are directly threatened by storms or wildfires. They also assess and vet technologies that can be implemented by homeowners, from impact glass to alarm and monitoring systems, to more obscure but potentially more important options.

AIG’s Poux recommends two types of vents that mitigate important, and unexpected risks.

“There’s a fantastic technology called Smart Vent, which allows water to flow in and out of the foundation,” Poux said. “… The weight of water outside a foundation can push a foundation wall in. If you equalize that water inside and out at the same level, you negate that.”

Another wildfire risk — embers getting sucked into the attic — is, according to Poux, “typically the greatest cause of the destruction of homes.” But, he said, “Special ember-resisting venting, like Brandguard Vents, can remove that exposure altogether.”

Building Smart

Many disaster resiliency technologies can be applied at any time, but often the cost is fractional if implemented during initial construction. AIG’s Smart Build is a free program for new or remodeled homes that evolved out of AIG’s construction insurance programs.

Previously available only to homes valued at $5 million and up, Smart Build recently expanded to include homes of $1 million and up. Roughly 100 homes are enrolled, with an average value of $13 million.

“In the high net worth space, sometimes it takes longer potentially to recover, simply because there are limited contractors available to do specialty work.” — Curt Goetsch, head of underwriting, Private Client Group, Ironshore

“We know what goes wrong in high net worth homes,” said Poux, citing AIG’s decades of loss data.

“We’re incenting our client and by proxy their builder, their architects and their broker, to give us a seat at the design table. … That enables us to help tweak the architectural plans in ways that are very easy to do with a pencil, as opposed to after a home is built.”

Poux cites a remote ranch property in Texas.

Curt Goetsch, head of underwriting, Private Client Group, Ironshore

“The client was rebuilding a home but also installing new roads and grading and driveways. … The property was very far from the fire department and there wasn’t any available water on the property.”

Poux’s team was able to recommend underground water storage tanks, something that would have been prohibitively expensive after construction.

“But if the ground is open and you’ve got heavy equipment, it’s a relatively minor additional expense.”

Homes that graduate from the Smart Build program may be eligible for preferred pricing due to their added resilience, Poux said.

Recovery from Loss

A major component of disaster resiliency is still recovery from loss, and preparation is key to the prompt service expected by homeowners paying six- or seven-figure premiums.

Before Irma, PURE sent contact information for pre-assigned claim adjusters to insureds in the storm’s direct path.

“In the high net worth space, sometimes it takes longer potentially to recover, simply because there are limited contractors available to do specialty work,” said Curt Goetsch, head of underwriting for Ironshore’s Private Client Group.


“If you’ve got custom construction or imported materials in your house, you’re not going to go down the street and just find somebody that can do that kind of work, or has those materials in stock.”

In the wake of disaster, even basic services can be scarce.

“Our claims and risk management departments have to work together in advance of the storm,” said Bitterman, “to have contractors and restoration companies and tarp and board services that are going to respond to our company’s clients, that will commit resources to us.”

And while local agents’ connections can be invaluable, Goetsch sees insurers taking more of that responsibility from the agent, to at least get the claim started.

“When there is a disaster, the agency’s staff may have to deal with personal losses,” Goetsch said. &

Jon McGoran is a novelist and magazine editor based outside of Philadelphia. He can be reached at [email protected]