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Presenters Rick Ladendorf

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1 Private Club Health Care Captive Self-Funded Group Stop Loss Captive Program

2 Presenters Rick Ladendorf
President and Founder of Prevo Health Solutions Contributing writer to the BoardRoom magazine, Executive producer of the CEO WELLNESS PLEDGE & the AMERICA'S HEALTHIEST CLUBS wellness rating system Ben Krambeck Managing Partner Benefit Captive RE Ben has 15 years experience in the Insurance Industry with a focus on self-funding alternatives for mid-size employers. Ben is a speaker and has published numerous articles regarding HealthCare Reform ACA legislation and Self-Funded Medical Stop Loss Captive programs. Darrell Fryer Managing Partner Prevo Insure Darrell Fryer has 19 years experience as a business owner/agency with employee benefits, Medicare, long-term care, life, auto and homeowners insurance for individuals and business owners throughout California. 17 years ago: PCMA 5 years ago: Eat Right America, transformation at Immersion

3 Today’s Objectives Controlling Health Care Costs through Self-Insurance. An overview of self-funding health benefits The structure and workings of self-funded plans Self-funded plans costs and administration Advantages & disadvantages of self-funding Qualification criteria to join the Private Club Captive Health reform and how that impacts self-funding plans Stop-loss Insurance to handle catastrophic claims Next Steps in moving forward Q&A

4 Fully Insured Model is Broken
Clubs surrender all control of one of their highest expenditures to an insurance company Canned programs (plan designs, managed care, HMO) Claims and data not accessible for analysis from carriers No transparency or auditing ability Insurance companies bill at maximum code price possible. Often for procedures that never take place. No bundled pricing. Premiums up 13% in last 10 years Cost shifting rather than solving Can’t manage health without knowing what your employees need help with.

5 The Ugly Unsustainable Truth
Talk about the Captives

6 Health Premiums in 10 Years

7 Most companies run a routine bidding process among insurers every year or two and then take the best deal offered by their agent. This is a shallow exercise that more often than not, does little to change the practices of providers. Year in, year out, it’s business as usual. CEO’s and CFO’s need to grab the non-system by the scruff of the neck and shake it up. One Company fires the employee in the probation period if they don’t stop smoking! 57% of all employees are insured through self-insured employers. Self-Insured Institute of America. 83% of employers over 200 employers.

8 Be the Club That Solved Health Care

9 Advantages of Self-Funding a Plan
Savings 25-30% first year and with a wellness plan, even greater Exempt from premium taxes in most states (1.5-3%) Carrier profit margins and risk charges are eliminated (3-5%) Benefit Flexibility-State Mandates are avoided-Self-Funded subject to ERISA and No HIT from Obamacare Control costs auditing capability, bundled pricing and price transparency. If Providers sees that you have the ability to see costs and go elsewhere, free marketplace kicks in and lower prices. Ability to design your own plan. Smokers pay more perhaps Accessible claims reporting packages available. Historical data to learn how to control claims. 80% of healthcare costs are treating 6 prevalent chronic diseases. (coronary, obesity, high blood pressure, depression, asthma, diabetes)

10 Advantages of Self-Funding a Plan
Cash Flow Benefit- No longer paying for fully insured carrier’s reserves, so funds in reserve at the end of the plan year in the claim fund retained. Money is only paid out when claims actually occur and can stay in a reserve account accruing interest until it’s needed. If claims are lower than expected, that money adds to the reserve. Value-based benefits and wellness programs (Prevo Health) Self-insured companies can mitigate risk and lower admin costs by working with Prevo Health and Benefit Re that offers: Stop-Loss Placement/Management Claims Processing (auditing ability to catch errors) Network Access and Management Medical Management

11 Benefits to Employees Premiums stay lower than state or national averages They keep the unused portion of their personal health account, and it rolls over to the next year They are healthier and stay out of hospitals They get cash rewards for going to Centers of Value Prescriptions are $1 or free Profit sharing and wage increases can be higher Primary care can be free More productive Job Security is enhanced

12 Disadvantages of Self-Funding
Risk assumption-100% of claims below the specific and/or aggregate attachment point are the responsibility of the plan sponsor Provision of Services-Employer must provide the services the insurance carrier typically provides Outlined in TPA agreement, whom employer hires to operate the plan in accordance with ERISA Asset exposure-The employer’s assets are exposed to any liability created by legal action against the self-funded plan Annual Risk 10-25% of Expected Claims Cash Flow fluctuations Reserves needed to switch to self-insured Requires a longer term commitment

13 Is Your Company a Candidate?
Was medical renewal last year higher than expected? Was the financial calculation of the renewal explained and backed up with actual claim experience? Were the reports provided to illustrate exactly where your health care dollars were being spent? Does the group’s current plan design take into consideration specific needs and utilization patterns? Are there financial incentives from the plan when claims run lower than expected?

14 Stop-Loss Coverage Protection against catastrophic or unpredictable losses Insurance company is liable for losses that exceed certain limits called deductibles The stop loss amount is a function of the company’s size, risk tolerance financial resources, location, plan of benefits, PPO network, and claims experience The premium is a monthly rate Specific and aggregate Specific: Claim on any one individual Group: Entire group for policy year

15 Why Prevo Health & Benefit Captive Re?
Successful 10 years experience with other industry self-insure captives One of the largest TPA in the country Benefits Captive Re and Claims Doc Ownership Online Wellness Portal & Programming Onsite Health Fairs and Educational Speakers Concierge level Employee Services Wellness & Prevention Programs change behavior which in-turn reduces claims Private Club industry first Industry Best Practices (AHC) CEO Pledge Legislation Voice in Washington

16 What Serigraph Implemented in 2004
Annual dashboard on tracking key metrics. Mandatory mini-physicals, blood work at the company run by nurse practitioner. 10% increase in rates for smokers Earn up to 2 days off for “wellness days” for pursuing healthy lifestyles and no more sick days off. Elaborate point system for well-ness rewards Coaching for co-workers who have health issues A free, on-site dietician, nurse practitioner, and chiropractor Free primary care doc through retainer whose mission includes wellness, prevention, and chronic disease mgmt. Formal programs for chronic diseases Tracking health metrics and free 2nd opinions $1 generic drugs (drug costs constitute 10-15% of a company’s health care bill) Offer a reward for finding billing errors and gives employees HALF the recoveries Bundled pricing, price transparency and Centers of Value Health ratings for providers such as hospitals. Audits of health care vendors. Ferret out which are the best and worst providers. Free second opinions

17 President of Serigraph, John Torinus Jr
President of Serigraph, John Torinus Jr., says “ you can’t manage health costs without managing health. You can’t get people to manage their health without a large dose of education. They need active, personal touch.” He adds, “ most employees want to be responsible for their family’s health and health costs. They want to manage that part of their lives. They want the latest information.”


19 Contact Information Rick Ladendorf or Darrell Fryer Cell: or

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