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Are You Getting Money Back From Lower Claims?

I have been promoting Administrative Services Only (ASO) for many years.  However this does create more work for Glendinning Insurance Services, and we are happy to do it. Our commissions are based on claims paid out, not premiums paid in.  This is the right thing to do for my clients.

Giving money back to clients at the end of the year is the norm.  This year has been exceptional, my clients have received large credits.

This is a difficult year for Insurance Companies to renew your benefits.  The lower than normal usage happened due to what I hope is an isolated situation.

How do Insurance Companies renew your rates this year??? Most Insurance Companies made money this year because employees’ usage was down for several months.  However, now that the medical and dental offices are back up and running the claims have increased.  If Insurance Companies renew based on your usage last year, they will have the potential of losing quite a bit of money this year.

I had one Insurance Company remove the 3 months where the claims were low and renewed based on the average claims.  This meant the Employer would have received an increase to their benefit rates.  There would be no consideration towards the profit they made off of the 3 months of low claims.

Why do I like Dental Administrative Services Only (ASO), and where the company is large enough ASO on the Extended Health Care benefit as well?  To demonstrate, here are some of the returns my clients are receiving:

  • 186 Employees – Extended Health & Dental ASO – Credit around $160,000 that has accumulated over time.  They are giving this excess back to employees by increasing benefits.  Can you imagine at this time, increasing benefits?
  • 200 Employees – Switched Dental to ASO a couple years ago, $33,000 credit.  If they would of switched Extended Health as well the credit would have been an additional $119,000
  • 100 Employees – Dental ASO credit $24,000  Every year they take back the majority of the excess and put it back into the company or else that credit would be substantially higher

What about smaller companies?

  • 17 Employees – Dental ASO credit $7,300
  • 22 Employees – Dental ASO credit $6,000
  • 11 Employees – Dental ASO credit $2,400
  • 16 Employees – Dental ASO credit $6,200

The list goes on.  For most of these clients that is one or in some cases over 2 months worth of their overall premium.

As a business owner I am constantly looking at places to save money. This is a no brainer.  However, if it isn’t handled by a Broker who truly understands how to price these benefits, and keep you the Employer updated, it can go wrong very quickly.

If you want to know the secret behind how Glendinning Insurance Services keeps their Client’s benefits and rates competitive?  Please contact us at 250-764-0142.

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