More and more often, when Russ Carpentieri answers his office phone, the person on the other end sounds worried, even desperate. “I’m at my wit’s end,” the caller frequently begins. Even before he hears another word, Carpentieri knows what the problem is: a benefits manager, CFO, or owner has just been handed a shocking rate increase by her company’s healthcare insurer.
It’s a story all too familiar to Carpentieri, a partner at Opus Advisory Group in Purchase. “These days, insurance companies often demand price hikes of twenty-five or even thirty-five percent over the previous year, while reducing the benefits they’re offering,” he says. For firms already gasping in the vice grip of the prolonged recession, this can make the squeeze tighter still. “Healthcare is one of the top three expenses for companies, along with rent and salaries, and it soon may overtake one of those other two,” Carpentieri notes.
But help, apparently, is available: Opus and other savvy, Westchester-based financial firms (there are hundreds of thousands of healthcare insurance consultants, but only about 5 percent do big-picture financial designing of their clients’ plans) have carved thriving niches in the healthcare benefits consulting field. Companies that seek out their expertise gain powerful allies in bargaining with insurers for high-quality, affordable coverage. “Never has a client failed to save money by using us,” Carpentieri declares. His 40-person firm uses proprietary software that identifies carriers’ most cost-efficient pricing for a given company’s needs and usage. Plus, he says, “We’re very hands-on and strategic in taking apart an insurer’s rationale for the increase they’re demanding.”
People think insurance claims are unpredictable. In fact, though, Carpentieri says, “they follow patterns, so we can predict with fair accuracy how often employees will need to go to the doctor or the hospital.” These patterns—and any rare deviations from them in a given year—are something Opus is quick to point out to insurers. “Say one employee at a company had an episode of cancer the previous year, which drove up claims, but the cancer’s now resolved. We’ll say to the insurer, ‘The cancer’s gone now, so why is that cost being factored into next year?’” Carpentieri says. “We represent the facts to the carrier and get some rate relief.” Naturally, Opus also shops around as well, soliciting competing bids to drive down the price still further.
The results? “They’re off the charts,” Carpentieri says. Though Opus aims to maintain or improve clients’ insurance benefits without any increase in premiums, “sometimes we’re able to even decrease their premiums by several percent while increasing benefits—and this is when they were worried they were going to end up paying up to a third more.” Miracles like these are one reason companies like Elmsford-based RMC Development, which supplies health insurance to about half its 50-person firm, relies on Opus’s advice when designing health coverage for its hundreds of employees. Over the past decade, Opus’s strategies have succeeded in saving the firm in excess of a half-million dollars. “Pricing has been one of the biggest issues for us when it comes to health insurance, and Russ has worked with us to come up with strategies so we can afford what we need,” says Tim Jones, managing member at RMC. “Russ is also very helpful in making sure that our insurers do what they’re supposed to do and deliver what they’ve promised.”
David Singer, president of Robison Oil, agrees. For the past two years, he’s relied on Opus to help negotiate coverage for roughly 100 employees, and says the results far exceed what his in-house management team was able to negotiate on its own, “Russ devised some very creative ways for us to save, and help our employees save too,” he explains. “By self-insuring a portion of our expenses, we’ve managed to still provide a high level of coverage for our workers without paying anything close to the premium increases our insurers initially wanted, which was often twenty percent annually.”
Small wonder that healthcare consulting, for which Opus typically earns a fee of between 2 and 4 percent of a company’s total annual premium payments, accounts for an ever-increasing percentage of Opus’s business. (The firm also specializes in wealth management.) Carpentieri and his team currently serve more than 200 corporate healthcare clients, “a number that’s increasing twenty percent annually,” he maintains. “We help companies pick the good stuff to give their employees, and help them do it at a good price.”
That’s a self-assessment, of course. Do third parties agree? Jim Rochel, a senior sales representative with Professional Group Plans, an insurance general insurance agent with offices throughout the tri-state area, provides a reality check. He helps companies such as Opus find plans that are a good match for their clients—“we’re kind of a broker’s broker,” he explains. Rochel says he’s impressed with Carpentieri’s team. Among the brokers he deals with regularly, some 75 to 125, by his estimates, “I’d definitely put Opus in the top ten percent.” His reasons? “Brokers like them—and there aren’t a lot of them—don’t just focus on benefits; they’ve really embraced the idea of designing the way companies actually finance their insurance expenses too. They absolutely deliver what they promise.”
Another company at the industry’s forefront is Altium Wealth Management, a healthcare and personal-wealth consulting firm located in Purchase. “The typical client who comes to us for help with health insurance is a company with between fifteen and several hundred employees,” says Managing Director James Giangrande. Much like Opus, Altium utilizes the latest software and data-crunching capabilities to identify and customize optimal coverage packages for clients. “It allows us to purchase benefits for them in a way that’s different and unique from how it was done even just five or six years ago,” Giangrande says.
One key cost-saver is for companies—under Altium’s careful guidance—to self-fund portions of employees’ coverage. “Let’s say a company has a policy that offers fifteen-dollar office-visit copays,” Giangrande explains. “We may advise them to buy one with fifty-dollar copays instead and finance the difference. The money saved on the policy can more than make up for it. Through hybrid self-funding, a hundred percent of our clients have saved money, and ninety percent have saved even more than they anticipated. Some of them have been using this tactic for five years, and their premiums are only just now catching back up to where they were before then.” It’s not only a major cost-saver for the companies, but for their employees, too, who get to skip major hikes to their deductibles.
One grateful client is Triboro Quilt Manufacturing, a firm with 135 domestic employees that manufactures crib accessories such as bumpers and comforters, with a presence in White Plains, Georgia, and the Far East. “We’ve been looking at possible premium increases of twenty-five percent a year these last few years,” says CFO Marc Zuckerman. “Our owners have always been very progressive—they didn’t want to simply say to their employees, ‘We’ve got a large increase on our hands, and you have to pay for it.’ And with Altium’s help, they haven’t had to. Jim has been able to lower the cost increases to below ten percent these past four years, and not only haven’t we reduced benefits, we’ve actually increased them.
Zuckerman is also glad to have Altium on his side when it comes to pressing claims with their insurer, another service the firm provides. “They don’t just help us structure our healthcare plans, they also run interference with the insurance companies,” he says. Altium’s skill in negotiating insurance disputes is, in fact, a particular source of pride for Giangrande and his staff. “Once, an employee of one of our clients needed to use Sloan-Kettering for cancer care,” Giangrande recalls. “The insurance company had said on the phone to the woman that Sloan-Kettering was in its network, but then it denied her claims, to the tune of about forty thousand dollars. We took the problem all the way to the state insurance department, who forced the insurer to make good and to change the way it represented itself. That’s what we do. We go above and beyond.”
The question is whether firms like Opus and Altium can continue to find breathing room in this rapidly evolving field—enough to continue reaping significant benefits for their clients. Professional Group Plans’s Jim Rochel observes that it’s becoming more challenging: “What these firms are really trying to do is help their clients find the best possible solutions, often by wrapping a secondary plan behind the carrier’s, but some insurers are not allowing the use of secondary plans” he warns. The insurers’ objection seems to be that if a company self-funds part of its insurance expenses instead of raising employees’ deductibles, employees will still be quick to utilize expensive services, keeping the insurers’ costs high. “We’re starting to see instances where insurers will load their rates in anticipation of this,” Rochel notes.
Definitely, challenges lie ahead. But while healthcare reform remains an ever-shifting target, firms like Opus and Altium are determined to keep their clients poised for continued success: “We don’t only prepare them for today’s challenges—we look ahead to the years to come, and spend time educating them about how to create more efficiencies,” Carpentieri says. “We aren’t satisfied until we’ve exceeded their expectations on every level.”
Deborah Skolnik lives in Scarsdale and frequently writes about business and finance.