Risk & Business Magazine California Fall 2017 | Page 27

PURCHASING COALITIONS
thought it possible in 2009 when
we first started to test the idea. Back
then, we believed that if we could
aggregate multiple companies and
get them to “act as one” for insurance
purchasing purposes, we could save
them all money and return any unused
premiums back to the group.
I think everyone intuitively
understands that the largest
companies in the United States
purchase their healthcare differently
and at a lower cost than everyone else.
The reason is their larger bulk gives
them access to purchase differently
in the insurance markets. The
aggregation of multiple clients to act
as one gives clients that same access.
It really has been fun to see this come
to 100 percent fruition. Thankfully,
we had some clients that believed in
us early on, and it has proven better
than any of us could imagine. It’s really
changing the markets that we are
deploying the HPCs in. I truly believe
it is a better way. As you know, Rudy,
we are working to get our message out
to other advisers to expose them to
this method. My hope now, with these
proven results and national attention,
is that it is adopted by others and really
helps change the national landscape of
employer healthcare.
Garcia: Within our industry, we’ve
seen a huge shift toward Healthcare
Purchasing Coalitions, but many
organizations and benefits purchasers
aren’t as familiar with them. How
do you describe HPCs to prospective
customers?
Rodgers: At the most basic level,
HPCs are groups of like-minded
employers who purchase health
insurance together. The way I like to
describe them is that an HPC allows
you, as a 50-employee company, to
purchase insurance like you are a
10,000-employee company.
Garcia: For a small- or mid-sized
company, I imagine the added
purchasing power goes a long way?
Rodgers: Yes, absolutely. Our coalition
members have access to the same bulk-
buying advantages as larger companies,
which helps them purchase better
benefits at lower costs. In addition,
the large numbers bring stability and
predictability to the group as a whole,
allowing us not [only] to price [at a]
more competitive level but also return
any unused premiums of the pool. This
year, we are returning $3.2 million in
unused premiums back to coalition
members. It is something that not
many others have been able to figure
out. custom programs based on actual
benefits used for each organization.
The HPC stabilizes costs across the
portfolio, so Company A and Company
B may have completely different plans
based on their employee population
without incurring higher premiums.
This enables member organizations to
only pay for the benefits they need and
not for benefits they don’t.
THE ONLY
REQUIREMENT
IS THAT A
COMPANY NEEDS
TO HAVE ABOUT
35 EMPLOYEES
OR MORE AND
A WILLINGNESS
TO SEE HOW IT’S
NOT WHAT YOU
ARE PURCHASING
FOR EMPLOYEE
BENEFITS, IT