The Challenge
A mid-sized aerospace manufacturer with 15 employees was trapped in the fully insured cycle: predictable double-digit renewal increases, zero transparency, and no control over their second-largest operating expense.
When their carrier proposed another 15% premium hike, leadership knew something had to change.
The Solution: Max-Funded Reference-Based Pricing
Memberly partnered with the company to transition from traditional fully insured coverage to a max-funded RBP self-funded arrangement.
What Changed
Reference-Based Pricing (RBP) – Hospital and facility claims repriced to Medicare benchmarks (averaging 140% of Medicare) instead of inflated billed charges (often 300-500% of Medicare).
Max Funding Structure – Monthly contributions set at the stop-loss attachment point. When claims run lower than expected, surplus is refunded. When higher, stop-loss protection activates.
Enhanced Cost Controls – Full claims transparency, strategic stop-loss structuring, and advocacy support to protect employees from balance billing.
The Results: Three Consecutive Years of Refunds
The transition delivered immediate and sustained savings, with the employer reducing total health plan costs by an average of 30% annually compared to their prior fully insured arrangement.
Surplus Refunds by Year
| Year | Refund Amount | Status |
| Year 1 | $55,000 | Issued |
| Year 2 | $50,000 | Issued |
| Year 3 | $46,000 | Pending run-out completion |
| Total | $151,000+ |
Implementation Strategy: PPO + RBP Dual Option
Rather than forcing an abrupt shift, the company offered employees a choice between traditional PPO and RBP networks.
Why This Approach Works
- Employee Comfort – Those preferring PPO familiarity kept their network access
- Immediate Savings – Even partial RBP adoption significantly reduced high-cost facility claims
- Risk Mitigation – Blended approach minimized disruption while capturing substantial savings
- Growing Confidence – As employees experienced RBP advocacy support, adoption increased over time
Result: The employer achieved seven-figure savings while maintaining high employee satisfaction.
Key Success Factors
1. Predictable Budgeting
Max funding locked in monthly costs, eliminating budget uncertainty.
2. Upside Participation
Surplus refunds returned to the employer—not the insurance carrier.
3. Strategic Stop-Loss
Properly structured specific and aggregate coverage protected against catastrophic claims.
4. Expert TPA Partnership
Memberly handled the operational complexity:
- Claims run-out monitoring and reconciliation
- Stop-loss coordination and threshold management
- Provider dispute resolution and balance bill protection
- Comprehensive employee education and support
Critical Considerations
While RBP delivers substantial savings, success requires operational excellence:
- Run-Out Management – Refunds issued only after complete claims processing
- Provider Relations – Proactive handling of balance billing and disputes
- Employee Communication – Clear education on how RBP works and advocacy support
- Stop-Loss Optimization – Proper coverage structure prevents exposure gaps
Bottom Line: With the right TPA partner, employers capture RBP savings without administrative burden.
Is RBP Right for Your Organization?
If you’re facing unsustainable renewals, max-funded RBP could transform your health benefits from a cost center into a strategic advantage.
Next Steps with Memberly
✓ Comprehensive claims history analysis
✓ Custom RBP savings modeling
✓ Side-by-side comparison vs. fully insured rates
✓ Implementation roadmap tailored to your workforce
Ready to explore your savings potential?
📞 Dom Maggiore
(631) 905-6555
dom.maggiore@memberlybenefits.com
