Self-Funded Health Plan Designs and Stop-Loss Insurance

Transcription

1 Self-Funded Health Plan Designs and Stop-Loss Insurance Specifically for Businesses With Five or More Employees

2 Agenda Why Starmark HealthyEdge SM? What is Starmark HealthyEdge SM Commissions How to Get Started 2

3 Why Starmark HealthyEdge SM 75% of companies think their broker will play a more important role over the next 3 years. 1 Benefit costs for self-funded employers rose 26% over past 5 years compared to 35% for those that buy health insurance % of employers with employees selfinsure; 13% of employers with <100 employees selffund. 3 1 Kantar Group Survey, 7/ Kaiser Foundation, 7/ Department of Health & Human Services Report, 3/2011 3

4 Why Starmark HealthyEdge SM Gives your employer clients... Lower costs Opportunity to get money back Flexibility in plan design without watering down benefits Knowledge on how claim dollars are spent... an alternative to status quo! 4

5 Why Starmark HealthyEdge SM Gives you the agent... Something different to present to clients Ability to differentiate yourself from other agents A door opener to expand client base... a way to add value for your clients! 5

6 Why Starmark HealthyEdge SM Starmark is expanding availability of self-funded plan designs with stop-loss insurance into new markets Target market: small to mid-size employers An alternative to fully insured plans Available to clients with as few as five enrolled employees 6

7 What is Starmark HealthyEdge SM? Self-funded health plan designs offer Opportunity for future savings through refund Stop-loss protection Predictable monthly payments 3 surplus option choices - surplus can be returned as administration fee credit or cash Aggregate and specific stop-loss protection against large unexpected claims from the entire (or whole ) group or just one individual 7

8 Who are Ideal Clients? Clients interested in an opportunity for future savings should medical claims be lower than funded Clients that want predictable monthly payments Clients that want to offer the same plan for employees in different locations Clients that want transparency on how their claim dollars are spent 8

9 Key Advantages of Starmark HealthyEdge SM Groups can have as few as five enrolled employees Many specific stop-loss levels from which to choose Stop-loss insurance and self-funded plan designs are bundled less hassles Aggregate Claim Liability Summary Report Mailed to the group monthly Claim utilization reports Provide transparency of how healthcare dollars are used No lasers (carve out specific risks in stop-loss contract) 9

10 Starmark HealthyEdge SM Stop-Loss Specific stop-loss levels $6,500, $10,000, $15,000, $20,000, $25,000, $30,000, $35,000, $40,000, $45,000 and $50,000 State-mandated minimum levels apply Aggregate stop-loss attachment point Will vary from 120% to 125% of expected claims State-mandated minimum levels apply 10

11 The Total Cost of HealthyEdge 3 Key Components Three parts make up the total cost of HealthyEdge Self-funded claims Aggregate claim liability ( claim prefund ) Administration expense Stop-loss premium Specific and aggregate stop-loss coverage 11

12 3 Surplus Options 1. Excess surplus* is credited to the group as an administration fee credit 2. Excess surplus* is credited to the group as an administration fee credit or cash 3. Excess surplus* is refunded as cash *All surplus options are subject to a terminal liability reserve adjustment. 12

13 Surplus Option 1 Excess surplus is credited to the group as an administration fee credit Group receives 2/3 of surplus as an administration fee credit at renewal to be applied toward the administration fee in the new plan year Starmark receives 1/3 of surplus as a delayed administration fee No credit at termination 13

14 Surplus Option 2 Excess surplus is credited to the group as an administration fee credit or cash Group receives 2/3 of surplus as an administration fee credit at renewal to be applied toward the administration fee in the new plan year Starmark receives 1/3 of surplus as a delayed administration fee Cash refund provided for on-anniversary termination No credit or refund for off-anniversary termination 14

15 Surplus Option 3 Excess surplus is refunded as cash Cash refund provided in the form of a check This is the only surplus option available in KY, NM, NV, UT and WV. 15

16 Claim Runout Handling Standard runout period 15-month runout (12/27) for all groups Ensures practically all claims are paid during the runout period 15-month period is consistent with the plan document Terminal liability reserve fund The amount that is set aside to pay claims during the 15-month runout period. 16

17 Timing of Surplus Determination Surplus determination refers to when the surplus accounting is performed. Surplus determination options: Groups with 5-24 enrolled employees Performed in 4 th month after renewal (16 th month) Groups with 25+ enrolled employees Choice of determination performed in either the 1 st or 4 th month after renewal (13 th or 16 th month) Option is selected at time of quote Note: In KS, surplus is determined in the 16 th month regardless of group size. 17

18 Financial Example #1 $200,000 ($160,000) $40,000 ($4,000) $36,000 ($12,000) $24,000 Annual aggregate claim liability Less actual aggregate claims Aggregate claim liability surplus Less terminal liability reserve adjustment Net aggregate claim liability surplus Delayed administration fee payable to Starmark Administration fee credited to group (or cash), depending on the surplus option selected Dollar figures are used for illustration purposes only. 18

19 Financial Example #2 $200,000 ($235,000) ($35,000) ($5,000) ($40,000) Annual aggregate claim liability Less actual aggregate claims Aggregate claim liability Less terminal liability reserve adjustment Total aggregate claim liability Dollar figures are used for illustration purposes only. In this example, the $35,000 aggregate claim liability is covered through aggregate stop-loss coverage. Trustmark also funds the $5,000 terminal liability reserve adjustment. 19

20 Application of Administration Fee Credit The administration fee credit is applied to the administration fee on the bill several times during the next plan year. If the administration fee credit is greater than the yearly administration fee, the difference will be refunded as cash at the end of the second plan year. 20

21 State-Mandated Benefits State insurance mandated benefits are not covered Many mandated benefits are covered, just not at levels required state-by-state Self-funded plans governed by ERISA don t require it Non-ERISA governed plans require state-mandated benefits to be covered; therefore, Starmark HealthyEdge SM is not available for non-erisa groups in select states. Churches, municipalities, and charter and public schools 21

22 Starmark HealthyEdge SM State Availability HealthyEdge is available in the following states: AL, AR, AZ, DC, DE, GA, IA, ID, IL, IN, KS, KY, LA, MI, MN, MO, MS, MT, NC, NE, NM, NV, OH, OK, PA, SC, SD, TN, TX, UT, VA, WA, WI, WV and WY. 22

23 Other Important Benefits with Starmark Express Connect enrollment is available Nationwide network access Personal sales reps to help you Optional plan benefits YourCare health and wellness program CareChampion 24/7 health advocacy service Inpatient Admission and Outpatient Surgery Access Fee Maternity Supplemental Accident 23

24 Starmark HealthyEdge SM Commissions Default broker commissions 9% of stop-loss insurance premium, first year 8% renewal Broker commission is adjustable 24

25 Getting Started: Marketing Material Highlights Sales Toolkit Available by logging on to > Sales Tools/State Resources PPO Advantage and CDHP Advantage plan design brochures Self-funded concept brochure along with 3 surplus option inserts State mandate comparisons A reference document highlighting state variations for specific and aggregate stop-loss coverage requirements Flyers Enrollment information And more! 25

26 Marketing Materials 26

27 Starmark HealthyEdge SM Give yourself the Edge get started today! Plan design availability and/or stop-loss 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. S br (4-9-13) 27