METHOD FOR USING FINANCIAL INCENTIVES WITH MEMBER ENGAGEMENT METRICS TO REDUCE HEALTH CARE CLAIM COSTS

A health care plan system and method designed to reduce future claims costs through financial incentives with member engagement metrics. Targets are pre-set for member engagement metrics. Claims cost targets for the sponsor are set based on the sponsor meeting member engagement targets. A percentage of health care plan base administrative fees are at risk based on the sponsor's claims cost performance in relation to the claims cost target. If the claims cost target is missed, the health plan administrator repays or reduces administrative fees charged to the sponsor. If the claims cost target is met, the sponsor pays additional fees to the health plan administrator. Base administrative fees are also repaid or reduced if the health care plan administrator fails to meet service performance targets. The sponsor is appraised on progress of member engagement and service performance metrics through scorecards that are sent during the plan year.