The 2019 Employee Benefits Power Brokers
Timothy Ayala, First Vice President, Alliant Insurance Services
Three tribal governments represented by Timothy Ayala of Alliant Insurance Services faced soaring premiums, so he proposed shifting from fully insured to self-funded health care programs to supplement the nominal health insurance the federal government is required to provide.
This proposal promised big risks, big rewards and big hurdles, said Dan Taylor, director of finance, Pechanga Tribal Government. Native Americans are not the easiest groups to insure, he said, because as a group, they face a number of chronic health risks, and unlike conventional employee groups, members never retire and often live well into their 90s.
“Most brokers couldn’t bring in a single carrier, let alone alternatives,” Taylor said, but Ayala’s “knowledge and experience and connections brought competitive bids in many types of plans,” including solutions available only to tribes that a less-immersed broker wouldn’t know about.
In 2018, Ayala helped advance high-dollar CHEF (Catastrophic Health Emergency Fund) cases that the federal government tried to deny in the hopes another insurer would pay, said Randy Bachman, tribal finance, Redding Rancheria.
“That takes knowing how the system works and willingness to do battle and stick up for [the] rights of clients,” he said. “Bringing the tribal council to a consensus was challenging,” said a human resources director.
John Baines, Partner, Aon
When PA Consulting considered a buyout on its billion-pound UK pension scheme in late 2017, a consultant told the company it was £150 million and a decade away from securing an insurance deal. “The numbers looked bleak,” said Dan Baker, pensions manager.
John Baines disagreed. “He looked at the insurance industry’s pipeline and saw a lot of appetite for our deal,” Baker said. Baines ran a few exercises to persuade the skeptics, including Baker, and concluded that £850 million was realistic and achievable in the short term.
The scheme’s 2,000 members now enjoy more secure pension benefits, and the company saves more than £100 million in premiums. “He looked at the problem a different and creative way,” said Baker.
In 2015, the Kingfisher PLC Pension Scheme was pleased with Baines’s team’s handling of a medical underwriting buy-in — a risk transfer insurance mechanism — and when market conditions were again competitive for another buy-in, the trustees reengaged him for a £230 transfer, completed in January 2018.
“Baines and his team delivered again,” said Dermot Courtier, head of group pensions.He said Baines read the market timing accurately, negotiated pricing and completed the transaction in a remarkable four to five weeks. But what distinguished him were his extraordinary communications skills.
“Insurance isn’t the trustees’ day job,” Courtier said.
Paul Fetterolf, Senior Consultant, Mid-Atlantic Region, Gallagher
It would be an understatement to say that a large manufacturing company was “dissatisfied” with the way its medical claims vendor processed claims on an ASO basis. The company noticed massive fees charged back to the plan for out-of-network claims the vendor paid incorrectly the first time.
Seeking greater integrity, accountability and transparency, Paul Fetterolf “tactfully but persistently moved us out of our comfort zone” by scrapping the company’s preference for large network providers and shifting to an independent TPA, said the company’s benefits leader.
The shift generated immediate savings, said the leader, such as $100 thousand-plus savings on out-of-network back surgeries.
One of Fetterolf’s N.Y. clients was withdrawing from a Professional Employer Organization.
That in itself is challenging, but coming out of a PEO, then setting up a new benefits structure and building new vendor relationships was “a huge undertaking,” involving complex interactions and conversations, said a company executive.
“Paul did it with tact, diplomacy and thoughtfulness. He’s a rare bird.”
When Fetterolf proposed a new voluntary retiree medical plan with structured copays for a large, self-insured, mostly unionized nonprofit, the benefits manager was interested in the front-end savings, the 40 percent reduction in premiums for those who chose it and the $6 to $8 million reduction in future liabilities for the plan.
Wes Grigston, Area Vice President, Gallagher
Wake Forest, North Carolina wanted to save taxpayer dollars on its health care spend by self-insuring, but it didn’t have a reserve fund set aside.
“Wes offered a solution,” said HR director Virginia Jones. Gallagher had set up public entity health care risk pools in Illinois, and Wes Grigson’s team researched and presented information to government entities across North Carolina to pattern a similar risk pool.
“Our commissioners were enthusiastic, but other municipalities were more risk averse,” said Jones. “Wes sent some Illinois folks to our meetings to explain their programs and help us set up.”
The pool started up July 1, 2018, and it has delivered savings so far, Jones said.
Orange County wanted to protect against future health care cost increases of 15 to 20 percent, so Grigston explored joining the same North Carolina health insurance pool, said Brenda Bartholomew, human resources director.
Grigston wrangled multiple issues, said Bartholomew: “Legal and contractual, bringing in Blue Cross as administrator, the third party stop loss, the system compatibility and enrollment issues, voluntary benefits — it was heroic.”
The City of Rock Hill is also self-insured, and it had two goals: Achieving the healthiest workforce possible and saving taxpayer dollars, said Lori Thomas, performance manager. Grigston, she said, immersed himself with the city and vendors to transform its onsite clinic.
Ethan Hendrickx, Area Vice President, Gallagher
When the three-year guaranteed-cost health insurance pilot program for Koinonia Homes’ low-income employees ended in 2018, the nonprofit faced 100 percent premium increases, said Diane Beastrom, CEO.
To mitigate the increase while preserving the company’s goal of high-quality, low-cost insurance, Ethan Hendrickx worked hard with the carrier on four plan options, from “very affordable to richer,” that locked in rates for three years.
“Ethan personally walked this through. If he hadn’t been in the meetings, if he hadn’t brought his resources and relationships, we would have had a different result,” Beastrom said.
The Rock & Roll Hall of Fame & Museum takes a populist approach to its benefits consistent with the music it memorializes.
Rather than eliminate its most expensive health care option, which would have made financial sense for the organization but run contrary to its culture, it hybridized its richest plan, cutting costs by eliminating a few less-used providers from the plan’s network.
“Some brokers don’t get so involved in the organization,” said Liz Peschges, VP, culture and strategy.
“They’re about spreadsheets and numbers.” Not Hendrickx.
“There’s a human here, and we trust him.”
Jamil Jaffer, Principal, Mercer
Northrop Grumman added 14,000 employees through an out-of-state acquisition in 2018. Its carrier’s limited geographical reach left out 3,000 of the new employees, frustrating attempts to offer uniform benefits without disruption.
Jamil Jaffer proposed one solution after another, said Leslie Melton, director of health and welfare plans. Working with the carrier, he finally created something original: a “narrow network plan” that expanded the current network to include a health care system accessible to the 3,000 employees.
“He did that during renewals and the integration of carriers. He’s a master juggler while we keep throwing balls into the mix.”
SouthWest Water Company’s insurance was complicated when Mercer won the account last year, said Mark Rodriguez, vice president, human resources. The company operated in multiple states with multiple carriers. It combined commercial and self-insurance. Its plans had multiple tiers of coverage combining employees and dependents.
Jaffer’s challenge: Bring the entire complicated plan into a single, fully-insured plan with four tiers for employee, spouse, children and family. He did it, Rodriguez said. For good measure, Jaffer also brought in the HSA the previous broker resisted.
Rodriguez expected 5 to 6 percent 2019 enrollment in that plan. Thanks to Jaffer’s communication plan, he got 13 percent. “That’s less cost for the company,” he said. “And the compensation committee is happy with me.”
Pepper Krach, Area Vice President, Marketing & Communications, Mid-Atlantic Region, Gallagher
Employee benefits are complex. Thankfully we have people like Pepper Krach to explain them in easy, simple and innovative ways.
Her communication skills were on full display with Genex Services — which surveyed 3,000 employees, finding that many lacked an appreciation for the consumerism behind high deductible health plans and health savings accounts.
So Krach developed a new way of explaining those concepts — a three-part video series featuring interviews with the company’s CEO, HR manager and senior vice president of HR.
Adding that human touch was far more impactful than sending a PDF or handing out a flyer. In the end, employees felt better educated about their benefit options.
“Her focus is communications and that’s an integral part of where we are with benefits today. There’s no such thing as putting out a booklet and expecting employees to read it,” said Debbi Bromley, senior vice president, human resources at Genex Services.
When a hospital system on the East Coast rapidly made five acquisitions of hospitals and health care facilities, Krach needed a way to help unify the HR employee benefits leaders from each hospital.
So she created a board game called The Destination Employer Game based on managing risk, improving employee well-being, attracting and engaging top talent and controlling health care costs. The primary goal of the game is to establish a combined vision and a spirit of community and collaboration.
Matt Maloney, Partner, Connecticut Practice Leader, Aon
Matt Maloney is a problem solver. When a large chemical company faced massive premiums resulting from having multiple pension programs — the result of a complex ownership structure that evolved over the years — he sprung into action.
Many participants had benefits under several plans, and the company was forced to pay premiums two, three, or even four times for the same employee.
In 2017, that amounted to approximately $150,000 of duplicate premiums. Over the decade, that amounted to around $3 million in excess premiums.
Maloney designed a strategy to move benefits for hundreds of former employees among the various pension plans and eliminate duplicate premiums. The result was a costs savings of $400,000 in 2018 and millions more over the coming decade.
The president and CEO of the company called Maloney the “ultimate professional,” “extremely knowledgeable” and someone with “the ability to speak about complicated subjects in layperson terms.”
Maloney was also integral in the Dow/Dupont merger. It brought together two of the world’s largest multinational companies and resulted in three different businesses: one for agriculture, one for materials science and another for specialty products.
“The merger of equals with Dow and preparation for the subsequent split into three companies have been a very complex process, yet Matt has continued to provide helpful and straightforward consultation on employee retirement programs,” said Patty Yang, chief actuary at Dupont.
Laurie Miller, President, 2HB Human Resources & Benefits Solutions
When Kaney Aerospace acquired a company twice its size, the benefits challenges were substantial. The organization needed to find a less expensive benefits program that didn’t sacrifice benefit levels or providers; bring a paper enrollment process online; and communicate the program to and assimilate newly acquired employees.
It was quite a task, but Laurie Miller was more than capable.
Miller got Kaney a free online enrollment system, assisted HR with assimilation and negotiated an employee benefits package that retained all benefit levels plus added additional coverages. Kaney Aerospace saved more than $200,000 on its medical plan and got a two-year rate guarantee on the benefits and network.
“The customer service is phenomenal,” said Dawn Johnson, HR manager at Kaney. “She has a great team in place that is there to answer all our questions. She is not afraid to work on our behalf with our vendors.”
When Miller began working with Arachnid 360, a manufacturer of electronic dart games, she noticed quickly that the company did not have stop/loss coverage in place.
“The policy triggers if an employee has $25,000 in expenses. It doesn’t take a whole lot to go over that threshold with major surgeries or something else major that occurs within the year,” said Deb Baggs, controller at Arachnid.
“It made us sleep a lot better once we knew the coverage was in place,” she said.
Megan Nichols, Associate Partner, Aon
Megan Nichols has a knack for saving clients money. Take Giant Eagle for example.
The supermarket chain in Western Pennsylvania froze its $200 million defined benefit plan at the end of 2016 — but still faced high annual administration costs and premiums to insure the plan.
Nichols realized that a lot of those fees stemmed from participants with relatively small benefit values — so she separated those with $5,000 or less and offered them a lump sum payment or enrollment into a 401(k).
That move alone saved the company $4 million. Soon the plan went from 75 percent funded to nearly 100 percent funded and achieved a reduction in estimated future cash contributions by $6 million to $8 million over the next 10 years.
“She’s always very responsive and knowledgeable with a high level of professionalism,” said Janice Talerico, vice president, Total Rewards and Chief Diversity Officer at Giant Eagle. “If I wanted someone on my team, I’d pick Megan.”
For another client, she led the effort to terminate their $1 billion pension plan, meaning that 16,000 active and terminated participants were offered a lump sum payout in 2018 — giving the company access to roughly $275 million of surplus assets.
Nichols helped ease the process with her impressive communication skills and knowledge of the business.
“She’s really relatable to folks, whether it’s a financial person, benefits person or a layman,” said the company’s director of retirement and savings plans.
Mark Patrick, First Vice President, Alliant Insurance Services
It’s no secret that saving money is crucial in the education sector. The Washington Education Association (WEA) certainly got cost-savings help through a creative offering led by Mark Patrick. He helped launch the Premera Education Pool in 2017-18 to great success, with 25,000 enrolled employees in its first year.
The new alternative saved the member school districts approximately $20 million in combined premiums while enhancing benefits for all pool participants. It’s now on its way to becoming the largest individually purchased educational pool in the state.
For another client, the Kalispel Tribal Economic Authority, Patrick has kept health care costs in check for its growing employee base that now numbers more than 2,000. In fact, benefits manager Deana Studnicka said they’ve only seen a 2.8 percent increase over the last 11 years.
“Mark is constantly saving us money,” said Studnicka. “He knows everybody in this town.”
Another client, Kim Maupin of Mortenson Dental Partners, said that once she started working with Patrick years ago, she never stopped — even when she changed jobs or he changed brokerages.
“Every time I’ve gotten a new position, I’ve hired him,” said Maupin. “If I changed positions again, I’d find a way to work with him. He’s upfront, honest and never steers me in a direction just because it’s better for him. He wants what’s best for our business, no matter what.”
Michael Rankin, Area Vice President, Gallagher
Fighting rising health care costs is no easy task. That’s especially true in Southern California, a predominately HMO market which is less able to capitalize on the consumer-driven plan designs being popularized in much of the rest of the country.
LPA Inc., an integrated design firm, found itself caught in the middle. “I am a financial guy, and I could see the future becoming unsustainable,” said Charles Pruitt, CFO of LPA.
Michael Rankin had a plan: increase deductibles on the HMO programs and offset costs to consumers with a Health Reimbursement Arrangement. That consumerism put the employees in the driver’s seat of their own health care costs.
“He brings new ideas to the table. He’s not shy about pushing back, explaining what’s happening in the rest of the industry and benchmarking us against competitors,” said Pruitt. “We appreciate that pushback.”
For a fast-growing construction management company fighting for talent in a tight labor market, Rankin helped secure a competitive benefits package.
With Rankin leading the way, the organization maintained single-digit price increases over the past two years.
The company now boasts one of the richest benefit programs in the construction management segment.
“Year after year we take little steps forward,” said the organization’s CEO. “After a while, you’re a mile ahead of the competition.”
Jeff Ries, Area Vice President, Gallagher
When two health systems in the southeast merged, Gallagher’s Jeff Ries helped them integrate both sets of 15,000 employees on to one platform. His expert negotiating skills with vendors led to $10 million in savings.
“Jeff delivers on his promises. If he tells you he’s going to do something, he follows through,” said the organization’s manager of employee benefits. “When we get frustrated or anxious he is quick to provide support and reassurance. I cannot imagine ever working with another broker.”
Andrew Halsey, chief human resources officer at HAECO, an independent aircraft engineering and maintenance group, said Ries is constantly delivering innovative ideas to HAECO. He’s also been integral in helping the company comply with strict government regulations for companies that deal with the military. “He’s the best broker I ever worked with,” said Halsey.
Yet another client, in charge of benefits at a large university, said Ries “saved us millions” over the years. She said Ries has the unique ability to talk in great analytical detail with benefits experts and also explain things simply to laymen. If that weren’t enough, Ries is one of the most hard-working professionals she’s come across in her career.
“We send late-night emails. He does a great job of making sure that the questions we have are answered and our deliverables and deadlines are met,” the client said.
“I don’t know when he sleeps,” she added.
Joshua Rubich, Area Senior Vice President, Gallagher
Consumerism may be popular in health care these days, but getting employees to agree to high deductible plans is no easy task.
The benefits team at a multi-state construction staffing firm with 1,600 employees has first-hand experience with that challenge.
In fact, the organization saw a mere 5 percent of its employees enrolled in its high deductible health plan — plus it faced a $1 million budget increase.
Gallagher’s Joshua Rubich employed a complex but effective plan: lower the deductible to the high-deductible health plan (HDHP), find a new pharmacy benefits management (PBM) vendor, and use engaging videos and other support tools to help people make better benefits decisions.
The results were incredible: Employee participation in the HDHP jumped to 40 percent, the organization saved approximately $1 million, and the new PBM vendor is on track to deliver approximately $400,000 in savings vs. projected claims.
“Josh is truly consultative. I’m confident he’s looking out for the best interests of our company and employees,” said the company’s chief human resource officer.
“He’s knowledgeable, smart and always there when you need him.”
Rubich’s considerable skills were also on full display in his work for Blackstone, a multinational private equity company with a wide-ranging portfolio of companies.
Matt Sears, Executive Vice President, EPIC Brokers and Consultants
For a home builder that acquired another, Matt Sears helped integrate hundreds of new employees to the benefits program.
He analyzed plan comparisons, costs and employee satisfaction, then created a targeted communication strategy, including web portal, mobile app, paper collateral, webinars, in-person seminars and telephone assistance.
The result? New employees seamlessly integrated into the new plan. Perhaps more importantly, those new employees got their first taste of the home builder’s strong, welcoming company culture.
“Whenever we have an employee or dependent in need of guidance or support, Sears and his team immediately drop what they’re doing and spring into action,” said the firm’s VP of human resources.
“I’ve always been so impressed and relieved that we have Sears and his team during crisis moments. Nobody is a number. Every single person is a real person.”
Sears was also instrumental for the Supercuts Franchisee Association, a collection of people who franchise the popular salon chain. In fact, Sears helped create a health plan that could work for all franchisee owners — both big and small.
Cheryl Robinson, co-owner of 48 Supercuts locations in the Southwest, said that Sears offers a personal touch in his work.
“At renewal, he shows us dollars and cents. But it’s not just about how much things cost.
Matt always asks: ‘How does this impact the hair stylist with two kids and bills to pay? What is the difference for her?’ ”
Melanie Stangl, Principal, Mercer
Advantage Solutions, a 50,000-employee retail sales and marketing company, recently acquired a similarly sized business. Integrating everyone on the same benefits plan was no easy task. Doing it in just four months made the task that much harder.
But Mercer’s Melanie Stangl was more than ready. She helped Advantage develop accurate financial projections, identify potential risks, work with carriers to prepare for a mid-year open enrollment, terminate the acquired company plans, advise on potential compliance issues and provide day-to-day support.
Most importantly, she negotiated the removal of termination fees and leveraged savings from the additional plan participants. The result? Savings of more than $2.5 million in 2018, a flat combined renewal for 2019 and a successfully integrated plan.
“We only had four people on the benefits team, no outside call center, and we received around 3,000 phone calls and 3,000 emails per month,” said the company’s former head of human resources.
“Melanie is like another team member. She genuinely understands the business. There aren’t words to describe the support we got from her. Now we can answer all those phone calls and emails, our claim renewals are flat and we’re being proactive vs. reactive with regard to communications.”
For the County of Orange, Stangl negotiated a low single-digit rate cap while also securing nearly $1 million in savings for 2019.
Tamra Walton, Area President, Philly Metro Branch, Gallagher
At a major art gallery on the East Coast, a high-level employee took their own life. Needless to say, the staff and leadership were shocked.
Tamra Walton sprung into action immediately, sending in a counselor to do group and individual sessions with employees — even though that fell outside the realm of the Employee Assistance Plan. She knew that the staff needed time to grieve, so she and her team stepped in to take over HR and benefit tasks.
“She just took care of it,” said the gallery’s chief human resource officer. “She knew that this person and I were really close. Tamra said to me: ‘Don’t think you’re going to file the death claim or handle other matters related to the death. Don’t worry about a thing.’
It’s indicative of how Walton deals with her clients — she’s not only proactive but incredibly caring as well.
“She’s a partner, not just a broker,” the CHRO continued. “She’s really there for you, understands your needs and provides solutions that are always innovative.”
That innovative thinking helped immensely for another client, a social services agency serving at-risk mothers and babies in Greater Philadelphia.
Finances were tight and the organization appeared to be facing a tough decision: pay for a double-digit health plan renewal or give employees much-needed pay raises. With Walton, they got both.
Lisa Wurster, Principal, Mercer
Lisa Wurster can come up with a strategic solution for any complicated situation. Her work for a national sports marketing company is a great example.
Tasked with harmonizing benefit plan designs and establishing a common administration platform for the company’s six different business units, Wurster came through in fine style.
The task was incredibly complex: each business unit had different plan offerings, plan designs, employer cost-share structure and renewal dates.
Wurster’s solution brought all the business units onto the same program, improved the enrollment process and increased the value of the benefit plan designs — and she did it all while saving the client 9 percent.
Another client is a nonprofit health system in the Midwest, which really needed to be conscious of spending when shopping for its health plan.
“She saved us hundreds of thousands. For someone running on a shoestring budget like us, it’s super helpful,” said the health system’s vice president of compensation and benefits. “She’s also really fun. She’s someone we all really like working with.”
Yet another health system uses its benefit structure as a differentiator to attract and retain the best employees. “We’re in a war for talent,” the director of compensation and benefits said plainly.
Wurster gave them the plan option they asked for and an analysis of market options.