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NFP makes mark in Boro
Previous Shaw-Hankins delivers $1 million savings for city, now has office downtown
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The insurance services firm that was formerly ShawHankins and is now part of NFP reports that it has saved the city of Statesboro more than $1 million in employee health care costs this year compared to last.

Meanwhile, Jonathan Shaw, who since 2012 had represented ShawHankins out of his home, moved into an office on North Main Street facing the Bulloch County Courthouse in March.

NFP now serves as employee benefits broker in the city’s partially self-funded health insurance program for employees.

“Through October, we’re on track to save the city more than $1.2 million,” said Shaw, now assistant vice president for NFP Corporate Services Southeast.

Acting on information and advice from what was then ShawHankins, the City Council made Anthem Blue Cross Blue Shield the administrator and stop-loss carrier of the city’s program beginning last January.

That gave city employees access to Anthem’s network of doctors and other health care providers. Through a previous broker, the city had used a third-party administrator and a regional provider network, IBG.

 “Ultimately, it’s all about the discounts on the claims,” Shaw said. “When an employee or a member goes to a physician and gives the physician their insurance card, it’s all about the carrier’s negotiated discount with those providers. With IBG, the discount was around 49%. With Anthem Blue Cross Blue Shield, they’re at about 62%.”

In other words, on a $100 initial charge from a doctor or other in-network provider, the city and the covered employee or family member now pay about $38, where they previously paid $51.

 

Charted savings

Shaw presented charts of recent years’ city health benefits costs to the mayor and council during a public Nov. 19 work session. At that time, he used three different ways of charting costs to show that, with year-to-date 2019 costs through September annualized by dividing by nine and multiplying by 12, the city was on track to spend $1.1 million less than in 2018.

Now, with October costs added and the 10-month expenses annualized, the projected full-year saving comes out to $1,227,687, he stated Monday.

Total claims paid after stop-loss reimbursements were $3,383,384 in 2018, after costs of $3,157,604 in 2017 and $3,249,104 in 2016, he reported.

But this year, with the change of network in effect, the city has paid $1,796,414 in claims and is on track to pay $2,155,696 in claims after stop loss reimbursements for 2019, Shaw projected.

 

Projected in 2017

The $1 million savings target goes back to the latter half of 2017, when City Council initially acted to award its health benefits broker contract to ShawHankins, which projected it could save the city at least $1 million in claims costs. The council’s decision, initially unanimous, was based on a recommendation from a committee of city staff members who heard companies’ presentations after a request for qualifications.

But the council reversed its decision after two other firms appealed to then-City Manager Randy Wetmore. A major contention was that ShawHankins had presented savings projections, which were not requested, while the other firms had emphasized their services and fees only. ShawHankins had also requested a higher fee than the previous broker, Glenn Davis & Associates.

Subsequently, the city ordered a study by a third-party firm. It gave an equivocal recommendation, and the city kept the Davis firm in the brokerage role for another year.

Last year, after a different request for proposals, City Council awarded the brokerage contract to ShawHankins but also awarded Glenn Davis & Associates a $12,000 one-year health advisory services contract.

 

Prescription costs

ShawHankins – now NFP Corporate Services Southeast – also carved out prescription drug coverage from the contract awarded Anthem and had the city place it with PharmAvail, a network that specializes in negotiating prescription drug costs.

So far, this is an aspect where NFP is also struggling to find ways to reduce costs.

“Our biggest challenge is prescription drugs, and that’s the biggest challenge in any market right now, and this number actually includes a pretty substantial increase in the cost of prescription drugs, or our performance would actually have been more favorable,” Shaw said.

Renewing with Anthem and PharmAvail this fall for continued coverage in 2020, the city government accepted two recommendations of changes from NFP.  One change is the addition of a fourth-tier of prescription copays, so that employees or coverage family members will now pay 25% of cost, up to $100 a month, for certain high-cost prescription drugs.

One such covered prescription costs about $40,000 a month, Shaw said.

The other change is the addition of an aggregate stop-loss provision. Previously, the city had a per-employee stop loss of $60,000 – meaning that Anthem covered amounts exceeding that for individual claims – but had now overall stop-loss. The new provision will cap the city’s liability at $3,007,668 for claims incurred in 2020.

“When you look at a lot of cities, some are looking at double-digit increases, and to be able to have a second year without any major increases is a good thing for the city of Statesboro,” City Manager Charles Penny said during the work session.

The cost reduction brought about by changing networks cannot be easily repeated. So NFP will now have to shift to increasing emphasis on wellness and encouraging city employees to use the provided clinic and continued efforts to address prescription costs, Shaw said.

 

Third-generation

Shaw, who attained his Bachelor of Business Administration at Georgia Southern University, had represented ShawHankins in Statesboro since 2012 but did not have an actual office until March.

His grandfather, the late James Henry Shaw Jr., founded the firm as the Shaw Agency in Cartersville in 1963. Jonathan Shaw’s father, James Henry Shaw III, and uncles later became owners in the firm. Scott Hankins, who had gone to work with Shaw’s father, eventually bought a portion of the company and became its director.

The firm had been a “benefits partner” of NFP when the larger company, originally National Financial Partners Corp., acquired ShawHankins effective April 1.  Hankins, based in Marietta, is now managing director of NFP Corporate Services Southeast.

Here, NFP also handles voluntary benefit plans – such as dental, vision, life and disability – for Bulloch County Schools employees – and helps inform them of state health benefit plan options during open enrollment. The firm works with county governments in Bryan, Toombs and Glynn counties and with the Savannah-Chatham County Schools.

Jonathan Shaw serves as a board member for the Bulloch County Foundation for Public School Education and the Statesboro Family YMCA and is a REACH Scholar mentor. 

Flavia Starling, previously city of Statesboro human resources director, is now NFP senior client service representative and the only other employee in the office, but Shaw said he expects to hire about four more people over the next three years.