We have found that a strategic plan and long-term cost forecast is vital to achieving the highest level of success. Organizations that adopt a long-term financial perspective are poised for action. Organizations that embrace this type of plan become very effective in managing plan costs and measurably beat cost trends year-over-year. Our clients already know what their plan design, employee contributions and net costs will be for the next five years.

Following is a profile of our approach to client engagements. This is a continuous process with an annual cycle.

Todd Associates possesses in-depth and unique knowledge of the regional market and the factors that impact the costs of health coverage for employers and employees. We attempt to delve deeper into the driving forces in our industry and use that knowledge to the advantage of our clients.

Here is a prevailing outlook of our market. Through carrier consolidations, hospital mergers, physician roll-up strategies, and concentrated market share in a limited number of pharmacy benefit managers, our marketplace is stagnant and uncompetitive, leaving few options for employers.

We see things differently. We feel that opportunities are abound and by employing our deeper understanding of the marketplace, we benefit our clients in many ways. We do not need to rely so heavily on carriers and vendors to achieve cost savings. There are other channels to use and strategies to employ to hit our goals. Through proper plan design, contribution structures, eligibility design, and wellness initiatives, we can dramatically impact costs, without as much as a phone call to a vendor.

Stop-loss coverage is one of our core competencies. We ensure that rates and terms are the best available and we further ensure that the contract provisions reflect that.

Matters that we would resolve include:

• The level of competition in the stop-loss marketplace. Generally, there is a reasonably vibrant stop-loss market, which creates a more favorable negotiating environment.
• The value of maintaining stop-loss with the medical plan vendor. More favorable financial rates and terms are typically found using that channel to purchase coverage.
• Speed of claims reconciliation (settlement).
• Ability and willingness to negotiate specific claims. For joint purchasing cooperatives and very large clients, we would explore more innovative arrangements.

Other innovative arrangements include:

• Deferred loss contracts to help control cash flow, while minimizing fixed costs.
• Internal stop-loss pooling to reduce insurance needs and thus costs.
• Internal stop-loss thresholds for large companies whose operating divisions are accountable for P&L to moderate period-to-period claim cost fluctuations at division level.

Reporting data is not enough, and clients of your stature should expect more. Todd Associates develops meaningful report and analysis tools to fully inform, and provide a basis for action for our clients. Our approaches, observations, and recommendations will always be supported by thoughtful and expert analysis. Following are examples of the types of reporting and analysis we will create and produce:

• Avoidable, lifestyle related claim costs
• Benefit modeling
• Financial projections for wellness initiatives
• Age/sex composition and benchmarks among districts
• Loss ratio performance (claim and fixed costs vs. forecasted costs)
• Pro-forma renewal development at periodic intervals
• Performance against negotiated financial and service delivery targets
• Large and developing claims analysis and projections
• For Private Equity firms or purchasing companies, financial risk and opportunities within an existing benefit plan
• Vendor performance reports against service and financial standards
• Additional reporting and analysis as needed for planning and decision making

Other explicit services that we provide and/or consult on include:

• Employee communication
• Web-based employer and employee benefit portals and resource centers
• Web-based research portals for employers
• On-line enrollment services
• Wellness initiatives
• Web conferencing and training vehicles