Self-Funding and Reference-Based Pricing for Smaller Employers

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1 Self-Funding and Reference-Based Pricing for Smaller Employers Self-Funded Health Plan Designs and Stop-Loss Insurance for Small to Mid-Size Businesses 1

2 About Starmark Since 1985, Starmark has served the healthcare benefit needs of employer groups Starmark administers self-funded group health plans exclusively for small to mid-size businesses nationwide Starmark provides a smooth transition to self-funding with customizable health plan designs that feel like a traditional fully insured health plan 2

3 About Starmark As a one-stop shop, self-funded plans are administered by Starmark and stop-loss insurance is provided by Trustmark Life Insurance Company, rated A- (Excellent) by A.M. Best This allows for seamless integration of plan administration, stop-loss insurance and claim payment Starmark offers freedom of provider choice for plans with a network [often Aetna Signature Administrators (ASA) or Cigna PPO Network] and plans without a PPO network 3

4 Self-Funding Simplified Employers pay a fixed monthly payment * When a self-funded major medical health plan design administered by Starmark is selected, both aggregate and specific stop-loss premium are included in the monthly payment. 4

5 Self-Funding Simplified Covered claims are paid out of the claim pre-fund account If claims are less than the employer funded, employers may receive the surplus either as an administrative fee credit or cash * If covered claims are more than the employer funded, stop-loss insurance pays the balance. Employers are protected against large, unexpected claims *Not all surplus options have a cash option. 5

6 Self-Funding Simplified Starmark provides efficient, secure, employee enrollment online or via telephone (and paper!) Employer online tools simplify plan administration, including utilization reports to better manage healthcare costs Plus, a choice of surplus options provides employers a refund opportunity if claims are lower than funded 6

7 Complete Benefits Package With Starmark s focus on healthcare benefits, employers can offer a complete benefits package such as an HRA or HSA Plus, fully insured ancillary products provided by Trustmark Life Insurance Company including dental, life/ad&d, and short-term disability plans 7

8 Cost-Saving Services Members can take advantage of these resources and services: Ways to Save educational tips to help members save on healthcare costs Grand Rounds medical second opinion Teladoc phone and video doctor consults Healthcare Bluebook online cost and quality transparency tool CareChampion 24/7 1 health advocacy service MyNurse 24/7 SM around-the-clock access to a registered nurse YourCare 1 health and wellness program with personalized outreach Healthy Foundations suite of health and wellness resources 1 Available as an optional benefit with some plan designs. Grand Rounds, Teladoc and CareOperative, LLC, which provides Healthcare Bluebook, are not affiliates of Starmark or Trustmark Life Insurance Company. 8

9 Healthy Choices Overview 9

10 What is Reference-Based Pricing? The practice of benchmarking claims to a reference point like Medicare or a cost-based data set 10

11 Paying Hospital Bills Billed $80,000 $85,000 $100,000 PPO Product In Network In Network Out of Network Allowed $40,000 (50% Disc) $42,500 (50% Disc) $45,000 (Method A) $30,000 (Method B using Reference-Based Pricing) No Network Reference-Based Pricing Allowed $30,000 $30,000 $30,000 11

12 Why Starmark Healthy Choices SM? Broker demand Sales opportunity an additional product Unique in Starmark s marketplace Lower-cost alternative Freedom of provider choice* *Except in the instance of organ transplants, where benefits are available when performed at a designated transplant facility, and specialty drugs, where benefits are available when provided by the designated specialty pharmacy as outlined in the plan document. 12

13 Healthy Choices Overview One set of medical benefits, no in- and out-of-network benefit differential There is no provider network* Uses reference-based pricing provider reimbursement is calculated as a multiple of Medicare (vendor is ClearHealth Strategies) In most states, 150% for physicians and 175% for facilities *Except in the instance of organ transplants, where benefits are available when performed at a designated transplant facility, and specialty drugs, where benefits are available when provided by the designated specialty pharmacy as outlined in the plan document. 13

14 ID Card The ID card explains the plan does not utilize a PPO network. It also specifies physician and facility reimbursement based on the member s resident state: The member ID card letter incorporates answers to frequently asked questions 14

15 Balance Bill Protection Threat of balance bills to member is biggest obstacle generally for RBP products Members are not responsible for charges above the Reasonable Fee Vendor negotiates with providers to reduce balance bills Amounts negotiated by ClearHealth Strategies above the Reasonable Fee are covered by the employer s self-funded benefit plan and stop-loss insurance 15 15

16 How Healthy Choices Works 16

17 Questions? For further details, including exclusions and limitations, contact your Starmark distribution partner. Plan design availability and/or stop-loss insurance coverage may vary by state. Self-funded plans are administered by Starmark, and stop-loss insurance is provided by Trustmark Life Insurance Company, Lake Forest, Illinois. B br (4-18) 17 17