We Share Ideas Large Claims > Deductible Hospital Surgery Chemo/Radiation Dialysis How Insurance Works Premiums Health Care Providers Small Claims < Deductible Rx Office Visits Routine Labs Insurance Company Cost of Health Care Cost of Administration Overhead Profit Company CoPays Copays Employee
We Share Ideas Large Claims > Deductible Hospital Surgery Chemo/Radiation Dialysis Large Claims > Deductible Hospital Surgery Chemo/Radiation Dialysis Premiums CoPays How Insurance Could Work Company X Health Care Providers Insurance Company Cost of Health Care Cost of Administration Overhead Profit Insurance Company Cost of Health Care Cost of Administration Overhead Profit Small Claims < Deductible Rx Office Visits Routine Labs Third-Party Administrator (TPA) Employee Copays
We Share Ideas The Result? Lower Premiums –Insurance Carrier covering only major medical Lower Costs Overall – 4 of 5 Companies will save money –Exceptions: The benefits you provide are minimal and inexpensive The company is only paying 50% or less of the insurance cost for the employee and little or nothing for the dependent Some Additional Risk HUGE Future opportunity – Health Care Reform could become your best friend!
We Share Ideas How Can I Make Mine Work That Way? Establish your own private Medical Expense Reimbursement Plan (MERP) IRS Section 105 – ca. 1954 Define your own Benefits Purchase Stop-Loss Coverage for high-cost cases –$5,000 individual/$10,000 Family –100% coverage above deductible Third-Party Administrator (TPA)
We Share Ideas HC Provider Bill Employee Expl. of Benefits (EOB) Insurance Co. (Primary Carrier) Submits Claim Third-Party Administrator (TPA) Premiums CoPay Payment Electronic Funds Transfer (EFT) to TPA Company Covered Expense? Exceeds Deductible? Negotiates Allowable Cost EOB (final) The Mechanics
We Share Ideas Key Considerations Define your own benefit levels (mirror existing?) –Deductible & max Out-of-Pocket –Employee Copays (office visits, drugs) –Preventative (Mammogram,Pap, etc.) –Other health-related items Dental Vision Stop-Loss coverage for high-cost cases –Group Insurance –Individual Coverage (now multiple sources) Compliance with ERISA, HC Reform, etc. (not simple)
We Share Ideas Employee Point of View Similar Benefits –Deductible - $500, $1,000, etc. –Employee Copays Office Visit = $20, $25, etc. Urgent = $35, Emergency = $100 Drugs – “Brand” = $25, $35, etc. Generic = FREE? –Preventative (Mammogram, Pap, Annual Physical?) –Other health-related items Dental – similar to standard Dental Vision – Max. per family? Similar Cost –Premium Copay – Spouse, Family, portion of Employee?? –% Covered Expenses – 80%/20%? Additional option – Pre-Tax HSA Account? Additional Work – Filing EOB #2
We Share Ideas Benefits to the Company Flexibility in adjusting benefits offered Flexibility in sourcing stop-loss coverage –Group Health –Spouse’s employer (reimburse pre-tax) –Medicare, Military or other Retiree plan –Individual Policies –State High-Risk pools –Childrens’ Health Ins. (Income-based) –Income-based or HIPAA eligibility –Income-based Rx plans from Drug Companies
We Share Ideas Benefits to the Company Use your own HSA as an additional tax- deferred savings opportunity ($7,150 if 55+)
We Share Ideas Pushback – Who Will Object? Insurance Agent (follow the money) You’ll hear all kinds of excuses, including “it’s illegal” Your HR Department (if they’re used to the Insurance Agent doing their work) Employees – Until they understand they’re getting better coverage this way –Significant employee education required – can be done and has been done successfully in CEBI companies –Can be Outsourced
We Share Ideas Essential Ingredients Experienced resource to analyze your savings opportunity Experienced resource to design your 105 plan Qualified TPA Enrollment assistance CEBI has qualified a referral source for all the above: www.chiefexecutiveboards.com/105
We Share Ideas Health Care Reform – The Business Owner’s Best Friend?