With healthcare costs spiraling ever upward, employers are searching for the most cost-effective way to provide and administer their medical and dental benefits. Corporate Benefit Services of America, Inc. (CBSA), based in Minnetonka, MN, is a leading provider of such cost management solutions. CBSA designs and administers customized self-funded and fully-insured plans targeting small to mid-sized companies. As part of its service offering, CBSA provides a complete range of medical insurance benefit administration services including health management service pursuant to its MC2000+ medical management company. MC2000+ offers both self-funded and fully-insured clients the ability to further manage cost through its large case, disease, chronic illness management and bill negotiation services. Operating on a nationwide basis, CBSA is in the top 10% of third-party administrators (TPAs) operating in the U.S. CBSA is one of only a few diversified companies that offer a full range of benefits products for its clients.
In a July, 2003 leveraged buyout, Churchill Equity and ESOP Capital Partners, a $240 million private equity firm in Minneapolis, MN, and CBSA management acquired CBSA from its majority shareholder, Code Hennessy & Simmons LLC. In support of the buyout, American Capital Strategies, Ltd. (Nasdaq: ACAS) provided $23 million in the form of a last out Term C senior loan and senior subordinated debt financing.
Since 1997, American Capital has invested approximately $1.8 billion in a wide range of middle-market companies.
For more information about American Capital's portfolio of companies click here.
"American Capital is backing a highly experienced management team, one focused on staying ahead of its competition through outstanding compliance procedures, advanced technology and new product development," said American Capital Principal and Managing Director Jeri J. Harman. "A top third party administrator, CBSA has strategically differentiated itself as a one-stop-shop, offering a full-range of healthcare benefit services which enable it to meet the demands of the growing healthcare market. CBSA's well-established market position, breadth of services and robust proprietary claims processing system are competitive advantages that place it in an excellent position to capitalize on the increasing numbers of employers who seek to lower healthcare costs by outsourcing their health plan administrative needs."
Founded in 1971, the company focuses its products on markets that are largely unaddressed by national insurance carriers and large national TPAs. These include small to mid-sized employer groups, usually consisting of less than 5,000 employees, in addition to employer groups with employees living in multiple states and outside major metropolitan areas, consisting of approximately 2,000 to 10,000 employees. CBSA is unique in that it is the only company providing both fully insured and self-funded plans as well as medical management services.
CBSA's self-funded plans are geared to smaller employers who self-fund their healthcare plans and thereby assume the financial risk for providing employee benefits. (Over 60% of U.S. employers choose self-funded plans.) CBSA's services include designing and implementing insurance plans based on a client's particular needs, processing claims, assisting with procuring stop loss reinsurance, and managing enrollment and payment processes. The company has the flexibility to administer all types of traditional health plan designs, consumer directed plans, flexible benefit plans and many others. With nearly 700 clients, CBSA is one of the largest administrators of these types of plans in the U.S.
CBSA also designs and implements fully insured plans for small employers,
usually consisting of less than 25 employees. The company uses certain
insurance companies' licenses to operate in states and utilizes
brokers and agents to sell CBSA's products. The company's fully
insured plans serve more than 4,000 clients.
CBSA's medical management company, MC2000+, provides value-added medical management services for virtually all of the company's clients in addition to those of some of CBSA's competitors. This segment is supported by 50 experienced registered nurses and professionals and directed by a physician. Through MC2000+, CBSA is able to generate client savings significantly higher than those typically achieved by its competitors.
The company also offers innovative employer benefits solutions, such as its Employer Solutions Plan, a hybrid product that combines aspects of both its fully funded and self-funded plans. CBSA also has a fully integrated flexible benefits, health reimbursement and medical claims product, also referred to as a consumer driven health plan.
CBSA's range of products and services give the company decided competitive advantages. The company's ability to offer fully insured products, which very few other TPAs offer, provide CBSA with strong underwriting and risk assessment capabilities that can also be applied to the design and implementation of CBSA's self-funded plans. The company's broad PPO network arrangements across numerous states, and particularly in underserved rural areas, enable it to compete with larger TPAs and national carriers. CBSA is able to provide superior service to the small to mid-size market.
With its innovative products and unique market position and capabilities, CBSA is filing a claim of its own - that of keeping healthcare benefits costs in check for small and medium-sized employers.
