PROJECT $2 MILLION | METHODOLOGY

How Economic Impact Is Calculated

A transparent look at how Project $2 Million measures the financial impact of smarter benefits strategies — without double counting overlapping improvements.

Project $2 Million measures more than premium savings. Economic impact can come from reducing employer benefit costs, lowering employees’ potential financial exposure, and identifying benefits-related tax efficiencies.

Plan Cost Reduction + Employee Financial Exposure Reduction + Benefits-Related Tax Savings

= Total Financial Impact

Each category is calculated separately. When benefit improvements overlap, they are not counted twice.

What Counts Toward Economic Impact?

Plan Cost Reduction

The difference between the current or projected annual health plan cost and the redesigned program cost.

Example:

  • $300,000 → $270,000
  • $30,000 Impact

Employee Financial Exposure Reduction

The reduction in potential employee out-of-pocket exposure created through improved plan design, multiplied by the number of enrolled employees.

Example:

  • $8,000 OOP Max → $4,000 OOP Max
  • $4,000 reduction × 25 employees
  • $100,000 Impact

Benefits-Related Tax Savings

Documented or estimated annual tax savings associated with eligible benefits strategies, such as a Section 125 plan.

Example:

  • $8,000 Annual Tax Savings
  • $8,000 Impact

Why We Don't Count Every Improvement Separately

A lower deductible can be a meaningful improvement for employees. But because deductible spending generally contributes toward the plan’s out-of-pocket maximum, counting both reductions separately could overstate the financial impact.

Deductible:
$5,000 → $2,500
$2,500 improvement

Out-of-Pocket Maximum:
$8,000 → $4,000
$4,000 improvement

The deductible improvement is shown, but only the $4,000 reduction in out-of-pocket exposure is included in Total Economic Impact.

The goal isn't to produce the biggest number possible. It's to produce a defensible one.

See the Math in Action

A simple 25-employee example

CURRENT PROGRAM

25 employees enrolled

Annual plan cost
$300,000

Individual deductible
$5,000

Individual OOP maximum
$8,000

IMPROVED PROGRAM

25 employees enrolled

Annual plan cost
$270,000

Individual deductible
$2,500

Individual OOP maximum
$4,000

Benefits-related tax savings
$8,000

$138,000

TOTAL ECONOMIC IMPACT

$30,000
Plan Cost Reduction

$100,000
Employee Financial Exposure Reduction

$8,000
Benefits-Related Tax Savings

The $2,500 deductible improvement is shown as part of the improved benefit design but is not added separately to Total Economic Impact because it overlaps with the out-of-pocket maximum.

Model Your Own Benefits Program

Current Program

Model an Improvement

Tax Savings

$138,000
Estimated Total Economic Impact
$30,000
Plan Cost
Reduction
$100,000
Employee Financial
Exposure Reduction
$8,000
Tax
Savings

Modeled Benefit Design

New Deductible: $2,500
New OOP Maximum: $4,000
Deductible improvements are shown but not counted separately in Total Economic Impact when they overlap with the out-of-pocket maximum.

Want the Real Number?

This calculator models possibilities using a few basic inputs. A Benefits Efficiency Review examines your actual plan costs, employee contributions, participation, plan design, funding structure, financial exposure, and available tax strategies.

Request a Benefits Efficiency Review

The first step is understanding whether the dollars you’re already spending could be producing a better outcome.