If you’re like most employers, you want to be sure your investment in employment benefits is working to give you the best value for your money.
A quick metric is to look at your “Target Loss Ratio” (TLR).
In simple terms, Target Loss Ratios indicates how much of your benefit premiums are going to cover the actual cost of your benefits and how much is going to administer your plan. The closer your TLR is to 100, the more efficient your benefits plan.
What Do TLRs Measure?
Every benefits plan has two buckets of expenses – one bucket is the cost of the health services and products provided to your employees. The other bucket is for the administrative costs involved with everything from designing your overall plan to paying and processing claims for the right services at the right rates.Both of these buckets come together to form your premiums.
Why Do TLR’s matter?
Controlling or reducing the administrative bucket of costs gives you the opportunity to put more of the money you invest in actual benefits for your employees.So TLRs essentially measure the amount of each dollar going to the provision of a benefit vs. the administration of the plan. And most importantly, apart from changes in the design of your plan, the most effective way to impact the cost of your premiums is to reduce administrative expenses or in industry speak “improve your TLR”.
This is where Corporate Benefit Analysts come in
CBA consultants are all experienced underwriters. We know how to bring efficiency to the administration of group benefit plans and we know how leverage the most from plan designs.
In 3 out of 4 cases, we’ve been able to improve our client's TLR’s. This means more premium dollars are providing more benefits.
If you’d like to learn more, simply click here and one of our experienced senior consultants will contact you as soon as possible.