Presentation on theme: "Presenters Rick Ladendorf"— Presentation transcript:
1 Private Club Health Care Captive Self-Funded Group Stop Loss Captive Program
2 Presenters Rick Ladendorf President and Founder of Prevo Health SolutionsContributing writer to the BoardRoom magazine, Executive producer of the CEO WELLNESS PLEDGE & the AMERICA'S HEALTHIEST CLUBS wellness rating systemBen KrambeckManaging Partner Benefit Captive REBen 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 FryerManaging Partner Prevo InsureDarrell 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: PCMA5 years ago: Eat Right America, transformation at Immersion
3 Today’s ObjectivesControlling Health Care Costs through Self-Insurance.An overview of self-funding health benefitsThe structure and workings of self-funded plansSelf-funded plans costs and administrationAdvantages & disadvantages of self-fundingQualification criteria to join the Private Club CaptiveHealth reform and how that impacts self-funding plansStop-loss Insurance to handle catastrophic claimsNext Steps in moving forwardQ&A
4 Fully Insured Model is Broken Clubs surrender all control of one of their highest expenditures to an insurance companyCanned programs (plan designs, managed care, HMO)Claims and data not accessible for analysis from carriersNo transparency or auditing abilityInsurance companies bill at maximum code price possible. Often for procedures that never take place. No bundled pricing.Premiums up 13% in last 10 yearsCost shifting rather than solvingCan’t manage health without knowing what your employees need help with.
5 The Ugly Unsustainable Truth Talk about the Captives
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.
9 Advantages of Self-Funding a Plan Savings 25-30% first year and with a wellness plan, even greaterExempt 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 ObamacareControl 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 perhapsAccessible 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/ManagementClaims Processing (auditing ability to catch errors)Network Access and ManagementMedical Management
11 Benefits to EmployeesPremiums stay lower than state or national averagesThey keep the unused portion of their personal health account, and it rolls over to the next yearThey are healthier and stay out of hospitalsThey get cash rewards for going to Centers of ValuePrescriptions are $1 or freeProfit sharing and wage increases can be higherPrimary care can be freeMore productiveJob 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 sponsorProvision of Services-Employer must provide the services the insurance carrier typically providesOutlined in TPA agreement, whom employer hires to operate the plan in accordance with ERISAAsset exposure-The employer’s assets are exposed to any liability created by legal action against the self-funded planAnnual Risk 10-25% of Expected ClaimsCash Flow fluctuationsReserves needed to switch to self-insuredRequires 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 CoverageProtection against catastrophic or unpredictable lossesInsurance company is liable for losses that exceed certain limits called deductiblesThe stop loss amount is a function of the company’s size, risk tolerance financial resources, location, plan of benefits, PPO network, and claims experienceThe premium is a monthly rateSpecific and aggregateSpecific: Claim on any one individualGroup: Entire group for policy year
15 Why Prevo Health & Benefit Captive Re? Successful 10 years experience with other industry self-insure captivesOne of the largest TPA in the countryBenefits Captive Re and Claims Doc OwnershipOnline Wellness Portal & ProgrammingOnsite Health Fairs and Educational SpeakersConcierge level Employee ServicesWellness & Prevention Programs change behavior which in-turn reduces claimsPrivate Club industry firstIndustry 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 smokersEarn up to 2 days off for “wellness days” for pursuing healthy lifestyles and no more sick days off.Elaborate point system for well-ness rewardsCoaching for co-workers who have health issuesA free, on-site dietician, nurse practitioner, and chiropractorFree primary care doc through retainer whose mission includes wellness, prevention, and chronic disease mgmt.Formal programs for chronic diseasesTracking 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 recoveriesBundled pricing, price transparency and Centers of ValueHealth 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.”