A Taylor Oswald Case Study in Uncovering Hidden Costs and Maximizing Benefits

I recently encountered a franchise owner receiving subpar service and a benefits package that felt expensive to both the employer and the employee. It’s a common scenario: you’re busy running your business, trusting the preferred vendor of your parent corporation, and assume this is what you must accept. But what if it isn’t?

The Franchise Trap: Preferred Vendors and Rising Costs

Not all franchise agreements mandate the use of preferred vendors for benefits programs. While established relationships can seem convenient, it can also lead to inflated costs and stagnant service. We recently worked with a franchise owner who was experiencing this firsthand.

This owner was in growth mode, actively seeking to attract and retain top talent. However, their existing benefits program with the corporate-preferred vendor, was expensive and unattractive to potential employees. Costs were rising year over year and there was no end in sight. Even more concerning was the lack of attention by their broker. Response times were slow, and innovative solutions were non-existent.

From Assumption to Opportunity: The Pursuit of an Attractive Workplace

This client, like many franchise owners, had been operating under the assumption that their existing arrangements were in their best interest. However, after I met them at a community event, they realized there might be an opportunity to get out of this cycle. Benefits were one of their top priorities if they were going to be an attractive place to work. So, they were willing to question the status quo. Their “preferred” relationship wasn’t equating to optimal value for the franchise owner or adequate customer service for their employees.

The Importance of Compliance and Affordability

Our review revealed significant issues with the client’s existing plan. With 67 people on the plan out of nearly 400 employees, participation was low. Employees stated the package was too expensive.  We revealed the guidance the employer was being given on affordability and plans was simply incorrect. Plus, a crucial element was missing: an affordable, high-deductible option.

This oversight had serious implications. Once a company surpasses 50 employees, benefits must meet affordability standards to avoid penalties and fines. ¹ The client had not been advised to meet compliance standards.

The 27% Shock: A Last-Minute Renewal Crisis

Taylor Oswald had already begun the due diligence of researching options and providing solutions. Yet, all respected the existing relationship and allowed the current broker to respond to questions and provide the renewal. Just ten days before their renewal, the client was hit with a staggering 27% increase from the preferred vendor. This was a critical moment. They needed immediate action to avoid a significant financial burden.

By securing the broker of record letter, Taylor Oswald was able to analyze the data, identify cost drivers, and leverage our carrier partnerships for an extremely expediated review of alternative quotes. We were able to secure a program with less risk and a reduction in premium resulting in nearly $240,000 in annual savings.

Beyond Price: The Importance of Service and Partnership

While price is always a factor, it cannot always be the sole driver of benefit decision. In this case, the price reduction was exceptional, but it was the result of Taylor Oswald’s relationships and commitment to providing exceptional service that has made this client’s renewal so successful. What is valued even more by this client is knowing they have a partner who looks out for them, understands them, and will proactively bring innovation and excellence on an ongoing basis.

The Value of a Proactive Approach

This case highlights the importance of proactive benefits management. Many franchise owners remain in comfortable, corporate-established relationships when they are not required to do so.

In franchise relationships, there is often a perception of an added workload with utilizing an independent consultant.  However, this franchise would be the first to admit that the change was undeniably worthwhile.

To ensure the most advantageous timing for data driven decisions to be effective, we recommend starting a review process months before your renewal.  Waiting until your renewal is issued, can create a time restriction that would not allow for a full review of the options available.  Taylor Oswald is ready to take a fresh look today.

Key Takeaways for Franchise Owners:

• Review your franchise agreement
  Understand your obligations regarding preferred vendors.
• Prioritize compliance and affordability
  Ensure your benefits program meets regulatory standards.
• Don’t wait for a crisis
  Cultivate partnerships characterized by proactive communication, benefits program reviews, and a shared commitment to progress for long-term success.
• Focus on service
  Choose a broker who prioritizes your needs.

If you’re a franchise owner, or any business, who wants to ensure you’re getting the best value for your benefits program, don’t hesitate to reach out. Let’s have a conversation and see how we can help you uncover hidden savings and maximize your employee benefits with exceptional service.

1 IRS Increases Safe Harbor Affordability Threshold for 2025