Maximizing Your Group Benefit Plan: The 80/20 Rule


The 80/20 rule, also known as the Pareto principle, is a concept that states that roughly 80% of the effects come from 20% of the causes. This rule can be applied in various situations to identify key areas where efforts should be focused in order to achieve the greatest impact.

In the context of group benefit plans, the 80/20 rule suggests that a small percentage of plan members often account for a disproportionate amount of claims and costs. By identifying these high-cost individuals and addressing their specific needs, the plan may be able to better manage costs and improve overall sustainability.

For example, a group benefit plan may find that 20% of its members are responsible for 80% of the claims and costs. These individuals may have chronic conditions or require frequent medical care. By implementing programs and resources specifically targeted towards this group, the plan may be able to better manage their care and reduce costs.

Additionally, the 80/20 rule can be used to identify areas where the group benefit plan is falling short in meeting the needs of its members. For example, if the plan finds that a high percentage of its members are not utilizing certain benefits, it may indicate a gap in communication or understanding of these benefits. By addressing this issue and improving outreach and education, the plan can better serve its members and improve overall satisfaction.

If you are interested in using the 80/20 rule to identify key areas for improvement in your group benefit plan and focus your efforts in order to maximize the effectiveness of the plan and better serve the needs of your members, we’d be happy to talk.