Employee Benefits Case study
One portfolio strategy. Approximately 20% lower ancillary benefits costs.
Virtus helped a private equity firm coordinate benefits across eight portfolio companies while preserving flexibility in medical plans.
The challenge
Eight portfolio companies were managing employee benefits independently. Each negotiated its own arrangements, and every acquisition added another set of decisions and administrative work.
The fund had an opportunity to bring its purchasing power together. It also needed to account for differences in the companies’ industries, locations, and employee populations.
The strategy
Virtus developed a benefits framework that combined purchasing where it made sense and preserved choices where employee needs differed.
For ancillary benefits, including dental, vision, and disability, the fund negotiated as a group. More than $3.4 million in combined premiums were brought under one carrier.
Medical benefits followed a different approach. Virtus established consistent plan tiers and employer contribution strategies while allowing each company to choose the network and carrier that best fit its employees.
The framework also gave the fund a documented approach for integrating benefits at future acquisitions.
The result
Ancillary benefit costs fell by approximately 20%, generating about $680,000 in annual premium savings across the portfolio. Those savings relate to ancillary benefits, rather than the fund’s total medical and ancillary benefits spending.
The fund also gained a repeatable benefits framework for its growing portfolio. Leadership could make coordinated decisions while retaining flexibility for the employees at each company.
Managing benefits across multiple businesses? Talk with our team about where a coordinated approach could fit your portfolio.