Anthem funding solutions More options, more control over health care spending

Transcription

1 Anthem funding solutions More options, more control over health care spending 52745MOEENABS 03/15

2 Protecting the health of your employees and their families we re all about that. Now let s protect the health of your business. Let s talk about funding arrangements, the easy way. Your business is as unique as the employees that make it successful every day. So choosing a funding arrangement for your health plan is definitely a big decision. It has to be the right fit, so you can keep your company s financial health strong and your employees feeling safe and valued. Looking for flexible funding options for your health plan? We ve got them! You have five funding options with Anthem. Here s an at-a-glance view to help you compare: Less financial risk Traditional fully insured Net cost funding Anthem Balanced Funding Minimum premium ASO More financial risk It s our job to help you find the perfect balance. With Anthem, you have more choices than ever to suit your business. You can choose a conservative arrangement or move toward one with higher risk but potentially greater reward. We ll help you with flexible solutions to fit your group s size, preferences and needs. Lower cash flow advantages Less benefit design flexibility More government regulations More taxes and fees More cash flow advantages More benefit design flexibility Less government regulations Less taxes and fees 1

3 The traditional, fully insured plan A tried and true go-to plan Many employers like you are most familiar with the fully insured funding arrangement. You pay a premium to Anthem and we assume the responsibility and related financial risk for paying your eligible employees health care expenses. This can be a good thing when your company s claims are higher than usual. But it also means that during the years when your employees are healthy and utilization is lower you don t get a refund or credit. Fully insured plans must be filed with their state Department of Insurance (DOI). They are subject to that state s DOI approval as well as federal regulatory requirements and oversight. Simple administration we collect premiums and pay claims No risk we assume full claims liability, including large claims Easy budgeting fixed monthly payments guaranteed through plan year With a fully insured plan: You ll have a set monthly premium. There s no risk to your group. Premium paid in full each month regardless of claim levels No refund of premium if claims experience is favorable Taxes and fees apply, such as state premium tax and the Affordable Care Act (ACA) insurer fee Anthem absorbs all gains and losses. Benefit payments are guaranteed by Anthem. Employers wanting a traditional fully insured product at the lowest cost Premium taxes apply. All Affordable Care Act (ACA) taxes apply. 2 3

4 Net cost funding This funding arrangement offers a possible refund on your premiums We developed net cost funding to give employers another way to get more value out of their health care dollars. This is a fully insured funding arrangement for experience-rated groups that lets them share the risk for their group s claims experience. If your company has favorable claims experience, you may be eligible for a refund. Rating is the same as fully insured with the addition of a minimal risk fee. Because net cost funding is considered a fully insured arrangement, it s subject to all state mandates and federal regulatory requirements. Your surplus or deficit is then applied as follows: 50/50 for groups with contracts 50% of contract year surplus is credited to the group. 50% of contract year deficit is carried forward to be offset by future year surplus. Standard for groups with 200+ contracts 100% of contract year surplus is credited to the group. 100% of contract year deficit is carried forward to be offset by future year surplus. Fixed premium paid each month Benefit payments are guaranteed by Anthem Opportunity for a refund of premium for years when experience is better than expected Here s how it works Premium paid in full each month regardless of claim levels Requires an additional risk charge Groups only benefit if claims experience is better than expected Taxes and fees apply, such as the state premium tax and Affordable Care Act (ACA) insurer fee Net cost funding includes a premium stabilization fund, which is limited to 10% of your yearly premium. It s used to even out your cost experience over the future of your contract: In favorable years, you would deposit part of your surplus into this fund. In years when there s a deficit, we use any monies in the fund to offset the deficit. However, the deficit carried forward is limited to 10% of your yearly premium. Financially stable groups with favorable claims experience who want the advantage of being self-funded, but don t want the claims payment fluctuations or risks that come with being self-funded Any eligible surplus amount after the entire deficit is recouped is then available for a refund. We ll charge interest (equal to the one year treasury note) for any deficits carried forward from the previous contract year. Retention costs include claims processing expenses, commissions, general office expenses and all applicable fees and taxes. The annual settlement is determined within six months after the end of the contract year. 4 5

5 Anthem Balanced Funding The savings of a self-funded health plan, with the peace of mind of a fully insured plan Saving health care costs is important to your business. Why not take a closer look at why converting from a fully insured to an alternative type funded plan might be the ideal solution giving you the control and insights you re looking for with the coverage your employees want. Simply put, balanced funding can help ease your administrative burden, while providing the potential savings and flexibility of a self-funded plan. Basically, it s the best of both worlds. Cost transparency built right in You ll get monthly reports that let you see how your health care dollars are being spent. This helps you understand the relationship between benefits and costs as well as identify opportunities to save money and even make smarter health care decisions. (These reports do not include protected health information.) Bottom line? Anthem Balanced Funding offers the potential for lowering your overall health care costs. Discover unexpected extras Many self-funded plans just provide the basics. But Anthem Balanced Funding offers the solid coverage you re looking for, plus lots of added benefits, like health and wellness programs to help employees get healthy and stay that way. Fixed, predictable monthly payments Losses above the maximum claims liability fund are paid by Anthem No deficit carry-forward Coverage for terminal liability (claims run-out) No ACA insurer tax and reduced state premium tax Money-back savings potential when claims experience is better than expected Standardized reports for a more comprehensive understanding of plan costs Plan design flexibility How does it work? Simple. With Anthem Balanced Funding, you make a fixed monthly payment that includes: Administrative fees. A paid claims fund. Premium paid in full each month regardless of claim levels Groups only benefit if claims are better than billed max claim fund Specific and aggregate stop loss coverage. Coverage for prefunded claims run-out.* * This helps to avoid unpleasant surprises if you terminate the plan and know your costs up front we collect funds to cover claims incurred prior to termination and submitted afterward Employers who want to limit claims risk, avoid some Affordable Care Act (ACA) fees, prefer a refund-eligible solution and would like to stay out of community rating At the end of the plan year when the claims fund is settled, you could actually get money back when claims experience is favorable. 6 7

6 Minimum premium The security of a fully insured plan with many of the advantages of self-funding With Anthem Minimum Premium, you pay low, monthly fixed costs and fund your claims through a bank account as they are paid. It also includes monthly claim liability limits and immediate individual stop loss protection, which can help you avoid higher-than-expected claim amounts in a given month. This is an ideal choice if you re searching for the protection of a fully insured health plan with the flexibility and cash flow advantages of a self-funded plan. More cash flow claims are funded weekly as they are paid by Anthem Limited risk Anthem assumes large claim liability and claims in excess of the monthly and yearly max Easy budgeting fixed maximum payments guaranteed through plan year No Affordable Care Act (ACA) insurer fee and reduced state premium tax Employers can enjoy a cash flow benefit Fixed minimum premium paid monthly Client funds claims weekly Deficit carry-forward is limited to 10% of the yearly claims liability limit Employers who want self-funding advantages along with protection for their monthly and yearly cash flow exposure because they don t pay claims until they re processed. 8 9

7 Anthem self-funded plans, also known as administrative services only (ASO) Greater financial control with benefit design flexibility With an ASO plan, employers can choose services that are the most appropriate for them and their employees while actively participating in the management of their health benefit plan. In this type of arrangement, you are charged an administration fee and your group is responsible for payment of all claims. To mitigate this risk, ASO is typically paired with an excess risk insurance policy called stop loss. We offer ASO for medical, pharmacy, vision and dental plans. Get added financial protection with Anthem Stop Loss Our financial stability and flexible choices help protect your business against unexpected losses. Specific Stop Loss Aggregate Stop Loss No state premium tax No Affordable Care Act (ACA) insurer tax Cash flow advantage through better than expected claims months Potentially lower costs through better than expected claims years Generally lower administrative costs Flexibility in plan design; less regulatory involvement Flexibility to remove certain state mandates Group pays administrative fees and monthly stop loss premium Client funds claims weekly Group assumes additional claims risk Total liability will vary from month to month Financially stable groups who want cash flow and are willing to take on more claims risk Anthem s ASO plans offer up-front pricing with no hidden fees. Your ASO fees include: General services Underwriting services Banking Reporting and analysis Claims services Total health solutions Just one member Specific Stop Loss reimburses employers for high claims associated with an All plan members Aggregate Stop Loss coverage protects employers from liability for claims costs over a specified individual covered member once claims exceed a specific amount (usually 125% of annual projected claims). This coverage threshold. The employer can choose the amount of applies to the aggregate total claims for all plan members. With an Anthem ASO plan you get: protection they want. Offers immediate reimbursement. This coverage is also available with a cumulative monthly cap. Protection: Limited financial responsibility for claims. After your Ease: You don t need to file a stop loss claim to get reimbursement Once an individual member s paid claims exceed the In this case, once the employer s claims exceed the year-to-date specific or aggregate limit is met, Anthem is financially responsible for and independent verification of member eligibility is not required. Also, agreed-upon stop loss level, Anthem covers all additional Aggregate Stop Loss threshold, Anthem covers all additional claims further claims costs. an ASO claim approved under our ASO benefit plan is automatically claims for the individual during the contract period. for the month. Employers enjoy monthly reconciliation and Employers enjoy immediate reimbursement of funds. reimbursement of funds exceeding limits. Cost control: Financial advantages of consolidated claims approved under the stop loss policy. 1 With either option, stop loss maximums are calculated annually and claims liability is not carried over from one year to the next. administration and stop loss coverage from a single source. Flexibility: Our Sales representatives and Underwriting will work with you to find the right stop loss coverage for your company Subject to policy provisions.

8 Anthem funding comparison chart Billing method How did actual paid claims compare to expected claim liability? Accounting of policy year surplus (comparing actual paid claims to expected claim liability) How did actual paid claims compare to expected claim liability? Accounting of policy year deficit (comparing actual paid claims to expected claim liability) Deficit carry-forward provision Traditional fully insured Prepaid monthly premium that includes expected claim liability, carrier administration fees and broker commissions. better than Carrier retains surplus of better than expected results. No additional cost to client under fully insured when claims run worse than expected; carrier absorbs all losses. Net cost funding 50%/50% Net cost funding 100% Prepaid monthly premium that includes expected claim liability, carrier administration fees and broker commissions. Also includes additional fee for opportunity to share in risk. better than 50% of surplus returned to client % of surplus returned to client. 2 50% of deficit absorbed by carrier. 3 1 (Client share of surplus must then be split by 50% again to fund premium stabilization fund); 50% retained by carrier. 2 50% of that must be used to fund premium stabilization fund. 3 50% of deficit can be carried forward into future contract to be offset by premium stabilization fund and/or better than expected future results. N/A 100% of deficit can be carried forward into future contract to be offset by premium stabilization fund and/or better than expected future results. Deficit carry-forward limited to 10% of annual premium. Anthem Balanced Funding Minimum premium ASO Carrier administration fees, broker commissions and maximum claim liability (maximum claim fund) are all prebilled monthly to the group; referred to as level premiums. better than Maximum claim liability is prebilled in monthly premiums; client is eligible for 70% of difference of actual paid and maximum claim liability. Client is eligible for 70% of difference of actual paid claims and maximum claim fund; client maximum exposure is initial prebilled monthly level premiums. N/A Carrier administration fees and broker commissions are billed monthly. Claims are billed weekly up to maximum monthly claim liability. better than Cash flow advantage to client as they pay only actual claims as they are presented. Cash flow disadvantage to client as they must pay total paid claims up to maximum claim liability with margin. Deficit carry-forward limited to 10% of annual maximum claims liability. Carrier administration fees and broker commissions are billed monthly. Claims are billed weekly up to maximum monthly claim liability. better than Cash flow advantage to client as they pay only actual claims as they are presented. Cash flow disadvantage to client as they must pay total paid claims up to maximum claim liability with margin. N/A Anthem funding arrangements Traditional fully insured Net cost funding Anthem Balanced Funding Minimum premium ASO Insured Yes Yes No Size employees (50% and 100% risk shared based on group size) Yes for state mandates; no for ACA federal purposes 10+ (enrolled) Pooling/specific stop loss Set by carrier Set by carrier Set by carrier Variable (within guideline limits) Variable (within guideline limits) Specific stop loss payout timing N/A N/A N/A Immediate Immediate Aggregate stop loss N/A N/A Required Required Available Aggregate stop loss claims margin/risk charge N/A 2-4% risk charge (varies by group size/risk share option) 20% claims corridor 20% claims corridor under 100 employees; 15% over 100 employees No 30% claims corridor under 100 employees; 25% over 100 employees Accounting N/A Annual settlement Annual settlement Monthly accommodation Monthly or annual accommodation Premium stabilization fund N/A 10% of maximum liability N/A N/A N/A Deficit carry-forward N/A 10% of maximum liability N/A 10% of maximum liability N/A Terminal liability N/A N/A Billing Fixed tiered rates monthly Fixed tiered rates monthly Priced/billed within product Fixed costs and max claims/ terminals billed in advance on tiered rates basis ITS/BlueCard Included Included Included Full terminal protection liability established at onset of contract Fixed ASO fees and stop loss premiums billed monthly and claims billed weekly Billed as claim or fixed PEPM Available (options from administration only to full protection) Fixed ASO fees and stop loss premiums billed monthly and claims billed weekly ACA insurer tax Included Included N/A N/A N/A ACA reinsurance fee PEPM Included Included Patient-centered outcomes research institute fees Included Included Billed as claim or fixed PEPM 12 13

9 Here to help you find your funding solution. For questions and information on all funding solutions, contact your broker or Anthem account representative. In Missouri, (excluding 30 counties in the Kansas City area) Anthem Blue Cross and Blue Shield is the trade name of RightCHOICE Managed Care, Inc. (RIT), Healthy Alliance Life Insurance Company (HALIC), and HMO Missouri, Inc. RIT and certain affiliates administer non-hmo benefits underwritten by HALIC and HMO benefits underwritten by HMO Missouri, Inc. RIT and certain affiliates only provide administrative services for self-funded plans and do not underwrite benefits. Independent licensees of the Blue Cross and Blue Shield Association. ANTHEM is a registered trademark of Anthem Insurance Companies, Inc. The Blue Cross and Blue Shield names and symbols are registered marks of the Blue Cross and Blue Shield Association.