How Custom Design Benefits Made Saving on Health Care Seamless for Springfield Township.
At a glance:
36,000 residents; $32 million annual budget; 106 employees with medical coverage; 120 with dental; $800,000 annual savings with CDB.
Introduction
Making big health benefit plan changes can be stressful, especially when switching carriers — and even more so when you're a human resources department of one, like Springfield Township's Larry Mullins.
As HR director, Mullins secures cost-effective benefits for law enforcement, fire protection, public works, and other essential services staff that the Township's 36,000 residents depend on. So in 2014, when the Township's carrier prepared a 35% increase totaling $500,000, Mullins knew it was time to explore other options.
Exploring Self-Funding.
Mullins recalled a previous employer that switched from large-carrier insurance to self-funding with CDB. As an independent TPA — not a subsidiary of an insurance company — CDB is free to offer more tailored, flexible solutions focused solely on clients' best interests. 'You have more control with self-funding than when you're fully funded,' Mullins said.
Making the Switch.
A committee with representatives from every department researched CDB and recommended a self-funded PPO with a high deductible plan that closely resembled the previous plan; the Board of Trustees approved it unanimously. 'We kept the exact same plan design that first year, so employees didn't see a difference other than greatly improved service.' Instead of paying $500,000 more, Springfield Township saw costs drop by 19%.
Transitioning to TrueCost.
When medical costs later trended upward, the committee looked at CDB's TrueCost offering with Reference-Based Pricing — a copay-only plan using Medicare rates as a basis for payment, eliminating coinsurance and deductibles. After some initial pushback, employees quickly liked TrueCost once they realized they were paying a 70% reduced out-of-pocket cost.
Six Years of Results.
From 2013 to 2021 CDB kept the trend at 16.5%, versus the 15-20% annual increases common with large carriers. 'We're around $800,000 lower on an annual basis than we would have been had we stayed fully funded,' Mullins said. 'They're not only an administrator. They give us advice, share information, and answer questions from our employees.'
