Friday, January 18, 2019
Monday, April 3, 2017
What is a Level Funded Health Plan ?
Self Funded Aggregate Only, or LEVEL FUNDING has been developed for employers with 25 to 150 employees and closely resembles a traditional fully insured plan yet provides the potential for a refund of surplus dollars at the end of the plan year. Level funding is a packaged plan that includes stop-loss insurance, administrative services with a guaranteed monthly maximum liability.
• All the benefits of traditional self-funding with the ease, look and feel of a fully-insured group health plan, a True ERISA plan
• Complete flexibility with benefit plan design
• Maximum plan costs are lower than traditional self funding
• More competitive against fully-insured quotes
• Employer writes just one check each month (based on plan enrollment)
• Monthly payment for LEVEL FUNDING includes premium, funding, stop-loss insurance, administrative services and guaranteed maximum liability.
• LEVEL FUNDING is spread over 12 monthly payments that do not fluctuate with claim activity; only with plan enrollment
• LEVEL FUNDING accumulates monthly – claims are based on the accumulated attachment point
• No SPECIFIC retention to satisfy
• LEVEL FUNDING could be satisfied by just one catastrophic claim, Carrier pays the balance
• Employer retains all unused LEVEL FUNDING monies at year after any run out.
• Multiple contract options and Terminal Liability available.
• Standard disclosure statement required within 60 days of the effective date
o Plan Participant Disclosure Statement on all individuals
• Monthly Reporting
Group Self Funded plans
Traditionally, Self-Funding has been a platform only the large employer could use to manage risk and decrease costs. With the changes we have in the Health Care field due to health care reform, even smaller employers are looking to this option to help accomplish their goals, even with the added risks.
A fully insured health plan has burdened employers with new taxes, fees and restrictions with the implementation of the Patient Protection and Affordable Care Act (PPAA). A Self-Funded plan can relieve the employer from new restrictions, and also some of the new taxes and fees. Some other expensive new rules that can be avoided with self-funding are modified community rating and a rise in required benefits that require insurers reduce their coverage options resulting with less plan flexibility. These new rules, and others placed on employer health plans by the Affordable Care Act, have had a negative effect on fully insured health plans.
An effective way for small employers to enter the Self-Funding arena is through a plan called Level Funding, or Aggregate Only. This is a form of Self-Funding which allows small employers the ability to budget its health care while minimizing risk. With a Level-Funded plan, a small employer pays a set amount each month. Plans differ but better TPA plans will allow the employer to use their own bank account for their monthly premium deposits. The TPA (Third Party Administrator) will then pull from their bank account to cover the cost of administration, a stop loss premium and the maximum amount of expected claims. This plan allows the employer to pay a set amount each month. The Groups premiums are paid into the employer’s bank account, building their own asset.
Two important keys to this plan working are monthly accommodation and advance funding provisions. In Level Funding, the employer is responsible to pay their “Expected Claim” amount, which is included in the total monthly premium. This is the maximum amount of expected claims based on underwriting projections. Any amount of claims over that amount is paid by the stop loss carrier. Advanced Funding provision will protect the employer from any month that their claims are over the expected claim planned.
The monthly accommodation will make sure that the amount the employer pays each month remains the same and there is no exposure to the employer for claims above the level amount funded toward the Plan’s cost.
For the smaller employer, advantages to level funding are:
1. If at the end of the policy term, payments exceeded claims, those funds remain with the employer.
2. If claims exceeded what was paid into the claims reserve, depending on the terms of the employer’s stop-loss insurance, the employer will have no liability for the overage amount. With the Advance Funding provision they have been taken care of.
3. Level Funding allows for a group to their claims data. Group Plan Solutions provides claim data on utilization trends giving the employer important information where employees may be causing overspending.
4. Level-Funded plans, offer regulatory oversight because they are partially self-funded plans and therefore exempt from state regulation and subject solely to ERISA.
Level-Funding plans do require a group complete medical questionnaires and go through other rules or guidelines to qualify for participation. The group is medically underwritten on their own claims and not shared in a larger pool.
A fully insured health plan has burdened employers with new taxes, fees and restrictions with the implementation of the Patient Protection and Affordable Care Act (PPAA). A Self-Funded plan can relieve the employer from new restrictions, and also some of the new taxes and fees. Some other expensive new rules that can be avoided with self-funding are modified community rating and a rise in required benefits that require insurers reduce their coverage options resulting with less plan flexibility. These new rules, and others placed on employer health plans by the Affordable Care Act, have had a negative effect on fully insured health plans.
An effective way for small employers to enter the Self-Funding arena is through a plan called Level Funding, or Aggregate Only. This is a form of Self-Funding which allows small employers the ability to budget its health care while minimizing risk. With a Level-Funded plan, a small employer pays a set amount each month. Plans differ but better TPA plans will allow the employer to use their own bank account for their monthly premium deposits. The TPA (Third Party Administrator) will then pull from their bank account to cover the cost of administration, a stop loss premium and the maximum amount of expected claims. This plan allows the employer to pay a set amount each month. The Groups premiums are paid into the employer’s bank account, building their own asset.
Two important keys to this plan working are monthly accommodation and advance funding provisions. In Level Funding, the employer is responsible to pay their “Expected Claim” amount, which is included in the total monthly premium. This is the maximum amount of expected claims based on underwriting projections. Any amount of claims over that amount is paid by the stop loss carrier. Advanced Funding provision will protect the employer from any month that their claims are over the expected claim planned.
The monthly accommodation will make sure that the amount the employer pays each month remains the same and there is no exposure to the employer for claims above the level amount funded toward the Plan’s cost.
For the smaller employer, advantages to level funding are:
1. If at the end of the policy term, payments exceeded claims, those funds remain with the employer.
2. If claims exceeded what was paid into the claims reserve, depending on the terms of the employer’s stop-loss insurance, the employer will have no liability for the overage amount. With the Advance Funding provision they have been taken care of.
3. Level Funding allows for a group to their claims data. Group Plan Solutions provides claim data on utilization trends giving the employer important information where employees may be causing overspending.
4. Level-Funded plans, offer regulatory oversight because they are partially self-funded plans and therefore exempt from state regulation and subject solely to ERISA.
Level-Funding plans do require a group complete medical questionnaires and go through other rules or guidelines to qualify for participation. The group is medically underwritten on their own claims and not shared in a larger pool.
Wednesday, December 28, 2016
An Open Letter to Employers:
How do Small and Mid-Size companies deal with the rising cost of Health plans and Healthcare? The tools that were once reserved for only the largest of companies to control their Healthcare costs are now available to groups with as few as 25 employees.
Does your current Health plan:
Reduce or eliminate the need for annual rate increases?
Provide detailed information about your plan’s performance?
Provide the tools necessary to plan for the future?
Eliminate the need to reduce benefits?
Provide a measurable return on Investment?
If NOT we need to talk…It all starts with a long term plan that is flexible with your goals and the ACA and recognizes that you cannot manage what you cannot measure. Your goal is not to spend more money on Healthcare but to spend your money in a more targeted way to minimize the risk while maximizing the plan’s potential.
The first step can be the hardest but to change results it must be recognized that one cannot continue to do the same things that are being done today.
My name is Jeffrey Metzger, Self-Funding Certified of Group Plan Solutions. My team and I specialize in helping employers make that first step and move down the road to accomplishing your goals. Our clients appreciate the fact that we think “outside the box” when it comes to employee benefit plans and seek alternatives that work.
I will call soon to find a convenient time for us to meet. If you wish to contact me, please do so at 614-551-5351. I look forward to our conversation. Thank you.
Sincerely,
Jeffrey Metzger
How do Small and Mid-Size companies deal with the rising cost of Health plans and Healthcare? The tools that were once reserved for only the largest of companies to control their Healthcare costs are now available to groups with as few as 25 employees.
Does your current Health plan:
Reduce or eliminate the need for annual rate increases?
Provide detailed information about your plan’s performance?
Provide the tools necessary to plan for the future?
Eliminate the need to reduce benefits?
Provide a measurable return on Investment?
If NOT we need to talk…It all starts with a long term plan that is flexible with your goals and the ACA and recognizes that you cannot manage what you cannot measure. Your goal is not to spend more money on Healthcare but to spend your money in a more targeted way to minimize the risk while maximizing the plan’s potential.
The first step can be the hardest but to change results it must be recognized that one cannot continue to do the same things that are being done today.
My name is Jeffrey Metzger, Self-Funding Certified of Group Plan Solutions. My team and I specialize in helping employers make that first step and move down the road to accomplishing your goals. Our clients appreciate the fact that we think “outside the box” when it comes to employee benefit plans and seek alternatives that work.
I will call soon to find a convenient time for us to meet. If you wish to contact me, please do so at 614-551-5351. I look forward to our conversation. Thank you.
Sincerely,
Jeffrey Metzger
Tuesday, March 10, 2015
Get your Health FSA's, HRA's, and HSA,s into compliance
Employers are turning to consumer-directed health care to help lower costs more than ever. Many employers turn to health flexible spending accounts ("health FSAs"), health reimbursement arrangements ("HRAs") and health savings accounts ("HSAs") to accomplish this goal. These are all types of consumer-driven health care, each with its own compliance-related issues. Surprisingly, many employers do not realize that health FSAs and HRAs require ERISA compliance. Plus, healthcare reform and recent IRS regulatory guidance impacts consumer-directed accounts. Employers must be more cautious than ever to ensure they are not inadvertently operating their consumer-directed plans out of compliance with a variety of employee benefits laws.
Please be very aware of the changes and contact me if you need some guidance. Rules have changed.
Please be very aware of the changes and contact me if you need some guidance. Rules have changed.
Tuesday, February 10, 2015
Should you "Self-Fund" your group health care plan?
Self-funding an employee health benefit plan is a long-term health strategy to save money
because it can provide an excellent opportunity for a company to achieve immediate savings
plus sustainable cost control. However, smaller employers may be hesitant to self-fund their health plan because they commonly perceive it as appropriate only for large companies.
Establishing the right health plan can become an integral part of the growth and success of
your company.
Smaller employers can be hesitant to self-fund a health plan because such plans are perceived as only appropriate for large employers. However, there exists new and innovative products and services specifically designed for employers with fewer than 250 employees that can make a self-funded health plan a compelling option for employers with as few as 25 employees.
This plan is called Level Funded or "Agg" only product. Individual Stop-loss insurance is purchased to protect the employer. With individual stop-loss insurance, when health claims reach a specific dollar limit in a plan year for a covered individual, the stop-loss insurance policy reimburses the employer’s health plan for claim amounts above the individual stop-loss insurance
limit. For example, if an employer has individual stop-loss insurance of $25,000 and an individual has $85,000 worth of claims, the stop-loss insurance policy would reimburse the employer’s health plan $60,000. The cost of stop-loss insurance is a monthly premium, and there are a variety of stop-loss insurance dollar amounts from which to choose. For employers with fewer than 250 employees,Pekin GPS offers stop-loss insurance with individual dollar limits.
They also deal with stop-loss carriers that reimburse the plan promptly when the stop-loss dollar limit is reached. Otherwise,your company could be responsible for covering the full amount of any excess claims until it’s reimbursed under the stop-loss insurance policy.
If claims are lower than predicted, the employer can save money directly, compared to paying the set monthly premium of a fully insured plan, while the stop-loss insurance policy puts a ceiling
on the maximum amount the employer would pay in claims.
because it can provide an excellent opportunity for a company to achieve immediate savings
plus sustainable cost control. However, smaller employers may be hesitant to self-fund their health plan because they commonly perceive it as appropriate only for large companies.
Establishing the right health plan can become an integral part of the growth and success of
your company.
Smaller employers can be hesitant to self-fund a health plan because such plans are perceived as only appropriate for large employers. However, there exists new and innovative products and services specifically designed for employers with fewer than 250 employees that can make a self-funded health plan a compelling option for employers with as few as 25 employees.
This plan is called Level Funded or "Agg" only product. Individual Stop-loss insurance is purchased to protect the employer. With individual stop-loss insurance, when health claims reach a specific dollar limit in a plan year for a covered individual, the stop-loss insurance policy reimburses the employer’s health plan for claim amounts above the individual stop-loss insurance
limit. For example, if an employer has individual stop-loss insurance of $25,000 and an individual has $85,000 worth of claims, the stop-loss insurance policy would reimburse the employer’s health plan $60,000. The cost of stop-loss insurance is a monthly premium, and there are a variety of stop-loss insurance dollar amounts from which to choose. For employers with fewer than 250 employees,Pekin GPS offers stop-loss insurance with individual dollar limits.
They also deal with stop-loss carriers that reimburse the plan promptly when the stop-loss dollar limit is reached. Otherwise,your company could be responsible for covering the full amount of any excess claims until it’s reimbursed under the stop-loss insurance policy.
If claims are lower than predicted, the employer can save money directly, compared to paying the set monthly premium of a fully insured plan, while the stop-loss insurance policy puts a ceiling
on the maximum amount the employer would pay in claims.
Sunday, February 8, 2015
China Suspected in Anthem Cyberattack
The massive cyberattack against health insurer Anthem Inc. received significant coverage on television and in print, garnering nearly seven minutes of coverage across all three network newscasts Thursday night. Sources indicate the attack, which compromised the personal information of tens of millions of Americans, may have originated in China. A number of media outlets portray the attack as the latest example of broader cybersecurity issues across the healthcare industry.
Scott Pelley reported in the lead story for CBS Evening News (2/5, lead story, 2:50, Pelley) that “cyber thieves” broke into a database at Anthem Inc., the country’s second-largest health insurer, jeopardizing the privacy of “millions of Americans.” The company “says that database contains 80 million records, including names, birth dates, and social security numbers,” though it’s unclear whether the hackers gained access to health records. Speaking on the potential fallout from the breach, American Medical Association President Robert Wah, MD, said, “If you lose your credit card, we all know you call 1-800-I lost my card and they turn your credit card off. There is no one-800-I lost my health record and you can turn off all that rich information in your health record.” CBS Correspondent Kris Van Cleave added that sources “say the FBI Is looking into the possibility the attack came from overseas, possibly China.”
Correspondent Pete Williams reported on NBC Nightly News (2/5, story 2, 2:40, Williams) that the Anthem cyberattack “is different from the recent big hack attacks of Target and Home Depot,” which “went after credit cards and account numbers.” This time, “the hackers were targeting the kind of personal information that can be used to steal someone’s identity.” Anthem says it appears no medical information or credit card numbers were compromised, “but it says a trove of personal data was stolen – names, social security numbers, birth dates, street and email addresses, and employment information.”
Scott Pelley reported in the lead story for CBS Evening News (2/5, lead story, 2:50, Pelley) that “cyber thieves” broke into a database at Anthem Inc., the country’s second-largest health insurer, jeopardizing the privacy of “millions of Americans.” The company “says that database contains 80 million records, including names, birth dates, and social security numbers,” though it’s unclear whether the hackers gained access to health records. Speaking on the potential fallout from the breach, American Medical Association President Robert Wah, MD, said, “If you lose your credit card, we all know you call 1-800-I lost my card and they turn your credit card off. There is no one-800-I lost my health record and you can turn off all that rich information in your health record.” CBS Correspondent Kris Van Cleave added that sources “say the FBI Is looking into the possibility the attack came from overseas, possibly China.”
Correspondent Pete Williams reported on NBC Nightly News (2/5, story 2, 2:40, Williams) that the Anthem cyberattack “is different from the recent big hack attacks of Target and Home Depot,” which “went after credit cards and account numbers.” This time, “the hackers were targeting the kind of personal information that can be used to steal someone’s identity.” Anthem says it appears no medical information or credit card numbers were compromised, “but it says a trove of personal data was stolen – names, social security numbers, birth dates, street and email addresses, and employment information.”
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