Plan, Design & Strategize

Innovative Plan Design Strategy and Analysis

Effective plan design is the key to providing high-quality, cost-effective health care to your employees. Sibson Consulting has extensive experience in the design and redesign of all health benefit plans, including medical, dental, prescription drug, vision, behavioral health, short- and long-term disability, life, accidental death and dismemberment, and flexible benefits.

We use a number of strategies to enhance the health plans of our clients. These include:

  • Participant cost sharing and contribution strategies
  • Multiple plan offerings/options
  • Targeted inner-tier and specialty carve-out networks
  • Opt-out incentives
  • High-cost claimant-case and chronic illness utilization management
  • Exclusions and limitations
  • Eligibility rules (for active participant and retiree health coverage)
  • Coordination of benefit and subrogation protocols

Cost and Utilization Modeling

Cost is an important consideration when planning any change in benefit plan design, as plan redesigns can have a significant fiscal impact on an entity. Sibson’s cost modeling experts and tools enable plan sponsors to make informed decisions about their plans.

Sibson can:

  • Evaluate the immediate financial effects of plan design modifications
  • Predict future utilization patterns and estimate changes in claims costs
  • Determine change or impact to member out-of-pocket expenses
  • Provide multi-year estimates of plan sponsor costs
  • Identify trends in the market and benchmark plan features to industry peers
  • Determine if plans meet minimum actuarial value standards imposed by the Affordable Care Act (ACA)
  • Assess costs resulting from ACA Compliance, including the Excise (or "Cadillac") tax

Our knowledge allows employers to make decisions that maintain the long-term sustainability of their plans.

Budgeting and Financials

Proper budgeting and financial monitoring is key to sustaining a health and welfare plan.

Sibson Consulting is able to help employers with the following services:

  • Projecting future claim expenses, premiums and premium equivalents
  • Developing required employee contribution and COBRA rates
  • Performing incurred-but-not-reported (IBNR) calculations required for self-funded plans
  • Analyzing the impact of proposed plan design changes on future expenses
  • Underwriting and funding methodology
  • Creating budget and renewal projections, as well as determining pricing for flexible benefits
  • Preparing annual health benefits reports, including FAS106 actuarial valuation reports, and assessing the implications for plan funding
  • Conducting merger studies
  • Analyzing the development of health care purchasing coalitions
  • Reviewing domestic partner benefits/imputed income
  • Creating and/or updating financial reports including information on per member per month (PMPM) costs and plan cost drivers

Data Mining and Analysis

Data mining gives employers valuable insight into plan costs and usage to improve decision making and financial analysis. Plan sponsors can determine the root causes of cost changes using data mining, which allow for targeted and effective intervention to manage future health care expenses.

Sibson Consulting's data mining services include:

  • Exploring emerging population health risk factors that impact utilization
  • Utilization reporting of claims by plan type, type of service and place of service, as well as by disease
  • Tracking treatment compliance rates of members with chronic diseases and preventive testing compliance of all employees
  • Uncovering potential fraud and abusive provider practices
  • Exploring the use of integrated medical management services and data-mining tools to identify patient risk, provide disease management education and offer provider quality data and best treatment protocols
  • Working with you to set specific program goals and objectives that can be measured and monitored
  • Developing a multi-year action plan to implement objectives and metrics for monitoring progress toward achieving set goals, as well as validating plan performance and contract terms are being met
  • Working with vendors to develop needed activity and metrics reports to measure program participation activity, as well as to make sure appropriate outputs/reports are being produced


Benchmarking is the process of identifying, understanding and comparing best practices across organizations. It is a powerful tool for an organization seeking to align benefit programs to the goals and strategies of the organization.

A competitive analysis of benefit programs serves as an important method to identify sources for program improvement, such as cost efficiency, recruitment and retention of employees. A benchmark assessment provides a unique and invaluable understanding of how benefit programs compare among competing organizations. Furthermore, a rapidly evolving industry makes it important for employers to understand not only the current benefit plans in place at key industry and geographic competitors, but also the future direction of the benefit initiatives competitors may undertake.

Retiree Health and VEBAs

Providing health benefits for retirees presents employers with many challenges. Sibson Consulting can help you find solutions that work for your organization and your retirees. Sibson works with a variety of employers that offer Medicare and non-Medicare retiree coverage, including prescription drug, dental, vision and life insurance benefits.

 Services we provide include:

  • Creating a modern retiree health strategy
  • Evaluating alternatives such as retiree self-pay policies, pre-funding retiree health benefits, health reimbursement accounts (HRAs) and other cost-saving measures
  • Implementing a Medicare Advantage fee-for-service arrangement or a private fee-for-service alternative
  • Evaluating defined contribution retiree health platforms with or without private retiree health exchange adoption
  • Performing a Medicare Part D actuarial attestation and review for creditable coverage
  • Negotiating with carriers regarding the rates and contractual arrangements for all offerings
  • Designing a plan for retiree prescription drug coverage
  • Assessing your plan's Retiree Drug Subsidy (RDS) savings to see whether the subsidy income meets expectations
  • Evaluating replacing RDS and self-funded prescription drug coverage with a Medicare Part D Prescription Drug Plan (PDP)
  • Preparing applications and assisting with administration of Employer Group Direct-Contract prescription drug plans
  • Conducting FAS106 Valuations Results and Financial Experience and Budget Projections (FEPBs)


A voluntary employees' beneficiary association (VEBA) is one option for organizations that are looking for a new way to handle the rising costs and obligations of retiree health benefits, especially when these benefits are collectively bargained or the company is in bankruptcy.

Sibson Consulting has experience with more than 25 retiree health VEBA clients  some of which have been in business for more than 25 years. This significant, in-depth experience in the creation, design, implementation, communication and administration of VEBAs is unparalleled. Our consultants are available to assist you and your attorneys in addressing the following aspects of a VEBA:

  • Establishing plan administration
  • Determining plan design
  • Determining funding options
  • Developing policies and procedures
  • Selecting, retaining and managing service providers
  • Investment consulting (provided by Segal Rogerscasey, our SEC-registered investment consulting affiliate)
  • Preparing documentation and participant communications
  • Preparing filings and disclosures
  • Obtaining fiduciary liability insurance

Consumer-Driven Health Plans

A consumer-driven health plan (CDHP) invites employees to become more involved in health care decisions and more aware of the true cost of care. An increasing number of health plan sponsors are turning to CDHPs in hopes of controlling costs.

The implementation of a CDHP involves a significant effort on the part of the plan sponsor and should not be done without considering the changes it would require from employees in terms of utilizing their coverage. In addition, deciding on the proper plan design  whether it be a Health Reimbursement Account (HRA)-based plan or an Health Savings Account (HSA) option coupled with a High Deductible Health Plan (HDHP)  and understanding the administrative and compliance challenges associated with each, can be confusing and challenging.

Sibson can help you determine the best way to introduce health care consumerism to your plan participants. This may involve implementing a CDHP, modifying your current plan designs to increase participant cost awareness, launching a communications campaign for conscious decision-making or some combination of these methods.

Employee Contribution Strategies

In our experience, employee contributions are one of the most visible and sensitive issues forming employee perceptions of health plans. Working with our clients we carefully evaluate employee contributions. We assist plan sponsors with outlining their employee contribution strategy by:

  • Using benchmarking data
  • Considering plan sponsor benefit plan objectives, future trends and employee satisfaction concerns
  • Reviewing financial impact for the plan sponsor and the employees, including affordability testing

The strategy an organization develops and uses will send messages to participants that the plan sponsor will want to ensure are consistent with its strategic plan. Sibson can help develop new strategies and, if the new strategy is significantly different from the current approach, we can work with plans to evaluate a “phase-in” process for its implementation.

We can also integrate the employee contribution review and cost sharing analysis with a client’s communication strategy to help plan sponsors communicate the benefit offering to employees, emphasize the portion of the total benefits bill that the plan sponsor is actually paying and encourage the right employee behaviors and selection results.

Value-Based Benefit Design (VBD) Strategies

Sibson has extensive experience designing and evaluating value-based benefit plan designs; we have worked with a number of clients to help develop custom value-based designs in order to help them achieve their health benefit goals. Introducing a nuanced benefit design that tailors cost-sharing for both high-value and low-value services helps to ensure clients are getting the most value for their health care dollars. By identifying and promoting the utilization of strategies and services, which have been found to be both clinically and cost effective, our clients have realized significant improvements in the overall wellness of their members.

Value-based plan design customizes plan design and management based on proven medical interventions, high-value therapies and efficacy, rather than providing a one-size-fits-all solution to coverage. These plans encourage treatments with evidence of clinical benefit and lowers financial and behavioral barriers to effective treatment. The plans also encourage participants to adopt healthy behaviors and help employers better manage plan costs. Examples of value-based plan design include:

  • Investing in wellness programs that are likely to have higher engagement rates and a meaningful impact on improving member health status
  • Broadening coverage for proven high-value, low-cost treatment options (e.g., generic drugs before brand-name, clinics before emergency rooms)
  • Using Targeted Utilization Review protocols for expensive therapeutic options and services that have little proven value or the greatest potential for abuse
  • Implementing Patient-Centered Medical Home, which fosters a relationship between primary care physician and patient, increases quality and consistency of care and lowers costs
  • Lowering member copayments on lower-cost retail clinics, telemedicine and on-site clinics
  • Promoting Accountable Care Organizations, which are collectively accountable for quality and total per capita costs across the full continuum of care for a population of patients

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