Breaking the Compensation Curve: Supplemental Benefits for Higher Education Employees

By BeneRe
December 4, 2023

How BeneRe Higher Education helped an ACC university offer enhanced benefits while lowering costs and growing dividends

BeneRe Higher Education is a Group Captive Employee Benefits Program designed specifically for non-profit colleges and universities. It offers supplemental benefits for employees, providing better coverage at a lower price, while employers see where every dollar is spent and gain access to dividends for their benefits programs.

In this case study of a major ACC university, we will look at the program’s benefits from the perspective of both the employee and the employer. We’ll also explore how claims integration helps improve the experience for everyone involved. 

Understanding BeneRe Higher Education

BeneRe Higher Education offers better coverage, lower costs, and new employee benefits for colleges and universities. Employee monthly premiums are paid directly to the insurance carrier, which holds all claims throughout the policy year. BeneRe Higher Education reinsures 100% of the program, while other aspects such as issuing policies, customer service, and claims processing are handled by one of the most respected insurance companies in the country. 

BeneRe Higher Education benefits employees and employers in many ways:

Employees: Employees get better coverage for accidents, serious illnesses, and hospital stays that pays them money directly when they need it most.

Employers: Employers get more financial transparency and the potential to receive dividends on unused benefits spending from everyone in the program. Those dividends are then reinvested in Employee Benefits Programs that help attract and retain talent in the future. 

Group captive vs. commercial insurance

Group Captive Employee Benefits Programs are an attractive alternative to traditional insurance plans. Rather than settle for a fully insured program through an insurance company, the university joins a group of colleges that are part of a captive that functions more like self-insurance. They then gain insights into how the financials work, where the dollars are spent, and take more control over how funds are used. Universities can also collaborate with other schools when looking for best practices. 

What’s covered by BeneRe Higher Education?

Voluntary Benefits Programs offer extra benefits beyond healthcare, dental, or vision coverage, and the benefits are designed to supplement the financial gap in medical insurance caused by high deductibles and out-of-pocket maximums. Premiums are typically paid by employees via payroll deductions, but some schools have begun to offer an employer-paid component to support HSA compatible health plans. 

BeneRe Higher Education provides three types of voluntary benefits:

  1. Critical Illness Care: We all know that critical illness expenses and lost wages can quickly add up to an astronomical burden for your employees – making it the leading cause of bankruptcies as well as 401K hardship withdrawals in America. Critical Illness Insurance provides additional coverage for specific medical diagnoses, including heart attack, stroke, and cancer. It also covers other chronic conditions from multiple sclerosis and Alzheimer’s to Parkinson’s and infectious diseases. If the member is diagnosed with any of these conditions, the program cuts a check directly to them.
  2. Hospital Indemnity: This provides additional hospital coverage to supplement your regular health insurance. Members receive a fixed amount when admitted to the hospital and on a per-diem basis. The money can be used for hospital care and related expenses like deductibles, coinsurance, transportation, medications, home health care, and even car insurance or mortgage payments.
  3. Accident Coverage: This helps members pay for expenses resulting from accidents. As with Hospital Indemnity, the benefits help pay out-of-pocket costs, such as deductibles, coinsurance, and even childcare. Payments are based on the type of injury and the treatment provided. Covered accidents include a range of things, from broken bones and dislocations to lacerations, burns, and physical therapy. 

Why universities choose BeneRe Higher Education

Perhaps the best thing about BeneRe Higher Education is that it offers highly differentiated benefits for employees and employers. Employees can gain access to plan designs that are much better than what is currently offered. They can also see an average cost savings of 10.3%. 

A Group Captive plan allows universities to offer enhanced coverage to pay for medical emergencies, accidents, and hospital stays for all employees. It can even cover employees who may not be eligible for benefits, such as part-time staff, teaching assistants, or adjunct professors. The reason is simple: By lowering the overhead costs of administration and distribution, along with insurance company profits, there’s more budget left over to expand the coverage.

For employers, the benefits add up. When it comes to voluntary benefits programs, most plans result in low claims ratios and high commissions, making them a bad deal for the employees and their institutions. However, BeneRe Higher Education offers complete transparency about commissions, expenses, and claims. There are no surprises, and employers know where every dollar goes. This is a major factor when deciding how to choose a good insurance partner for the program: If a carrier is not willing to fully disclose where every dollar goes, employers should be on alert.

As a group captive insurance company, BeneRe Higher Education reinsures every plan. When there are unused funds, that means they come back to the plan holders to be distributed as dividends. So even if claims rates turn out to be lower than expected and there are leftover dollars in the plan, that money goes back to your institution to use in future health and wellness spending. These captive distributions have ranged between 20% and 30%. 

In the end, BeneRe Higher Education leads to better benefits for your employees and better engagement and retention rates for your university.

Case Study: One University’s Experience

BeneRe worked with a major ACC University to help them design a Voluntary Benefits Program that offered cost savings and an opportunity to earn dividends. 

Before BeneRe Higher Education

The University had already moved carriers several times searching for better pricing and coverage, so they weren’t apathetic about their supplemental benefits programs. BeneRe conducted an in-depth analysis of their current programs and determined they could see cost savings and offer better benefits with the BeneRe Higher Education model. 

The University didn’t expect us to find much of a difference, so they were surprised when we were able to identify significant plan enhancements. When they saw the savings, enhanced benefits, and the projected dividends, the decision became easy.

The university’s results

  • 5,700 eligible employees enrolled 
  • 80+ benefit enhancements
  • 14% employee cost savings
  • 25% projected dividends

The cost savings and dividends were better than anyone expected, and of course, the University is happy to be able to offer its employees better benefits that lead to better employee financial protection. This is especially appreciated during the past two years of a global pandemic.

The savings and enhanced financial benefits for employers and employees are easy to quantify. One added benefit is that the university is exposed to no downside risk from the captive model, but they will get to know how the plan is running and where their program’s premiums are going every quarter. They also plan how to reinvest the dividends they’re earning. 

Those benefits can be significant. BeneRe worked with another University, this one in the Big 10 Conference. In the program’s second year, they have around 17,000 eligible employees, and we estimate their dividends will be approximately $375,000 this year. 

BeneRe Higher Education: Making the grade for universities

BeneRe Higher Education offers a Win/Win for university employees and employers. Employees experience the benefit of lower costs and enhanced coverage, which comes to the rescue during the most trying times. Universities enjoy financial transparency and the potential for significant dividends, which are then invested back into their employee benefits programs.

Reach out today to set up a complimentary financial analysis and see how BeneRe Higher Education can help colleges and universities make the grade for their employees and unlock significant financial resources.