Case Study

WireRope: Mid-sized manufacturing firm cuts health benefit costs 35% in year one, defying industry trends

35%Savings in the first year 
$2.2 millionSaved in year one (from a $6.6M renewal down to $4.2M spend)
$39.2 million10-year savings
Reinvested savings into operationsFunding the plant’s first major equipment investment since WWII
Employee contributions remained flatWith lower out-of-pocket expense for employees, including waiving all  but co-pays for certain preferred providers

Table of Contents

Overview
Challenge
Approach
Results

A mid-sized manufacturer faced a steep renewal increase that outpaced annual profit. By switching to a Homestead RBP plan, the company reduced projected spend and sustained lower costs over time, while keeping employee contributions flat.

The Challenge

At renewal, the company faced a 27% increase in health benefits. Their $5.2M health care expense was projected to rise to $6.6M, an increase larger than the prior year’s profit.

The Homestead Approach

By switching to a Homestead RBP plan, the organization moved off a traditional PPO renewal trajectory and into a pricing approach designed to reduce spend while maintaining a stable employee experience.

Results and long-term impact

Reduced renewal projection from $6.6M to $4.2M, saving $2.2M in the first year
Sustained cost advantage over time: 9 years later, actual RBP costs were still lower than the initial PPO renewal
Protected employee affordability: employee contributions remained flat and out-of-pocket costs decreased
Created flexibility to reinvest: supported significant business investment using savings from the RBP switch