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How This National Franchise Avoided $4.5 Million In Department Of Labor Fines

Problem:

A national franchise’s self-insured health plan was running poorly, and this was negatively impacting their 80 franchisees.

The organization had made several aggressive changes to how healthcare was financed and procured but was not confident that their broker was giving them good advice on how healthcare dollars should be invested.

Action:

Health Compass’s Health Insurance Strategy Audit (HISA) put a microscope on their broker’s recommendations and decisions that had been made over the past 4 years. 

Results:

While Health Compass agreed with many of the recommendations the broker had made, they discovered one potentially catastrophic risk that had been overlooked.

Since all 80 of the company’s franchises were independently owned and operated, the company had unintentionally created a Multiple Employer Welfare Arrangement (MEWA) that — if discovered by the Department of Labor — would result in approximately $4.5 million dollars in fines to the company.

By getting objective, expert, advice from Health Compass, the Franchise dodged what would have been a catastrophic fine from the Department of Labor. 

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