WHY RISK IS ESCALATING: A MARKET PERSPECTIVEMany factors have produced escalated risk for self-insured clients. The recent overhaul of healthcare regulations, high- cost claims and the reinsurance market structure all pose increased challenges that go beyond shifts in the market.

HEALTHCARE REFORMThe recent Healthcare Reform measures enacted by the government have resulted in changes that will mean greater demands on a company’s budget. » Unlimited lifetime dollar maximum for plan participants » Increased annual maximum limits moving to unlimited » Expanded dependent coverage » Medical Loss Ratio (MLR) requirements that accelerate

carriers’ need to promote other profit centers

HIGH-COST CLAIMSThe incidence of high-cost claims is increasing at a faster rate than routine claims, meaning that the likelihood of paying out more than anticipated is also increasing.

HIGH-COST CLAIMANTS: » Often receive less of a discount than routine claims » 0.6% of the insured population drives 29% of the cost » Likely to have one of six key diagnoses

M E D I C A L S TO P LO S S

P R E M I U M STA B I L I ZAT I O NP R O G RA M

REINSURANCE MARKET » Annual pricing does not provide predictability or stability » Higher deductibles for high claimants (Lasers)

represent additional cost/risk transfer to employers » Provider contract requirements do not allow for

managed claims/alternative programs » Carrier/TPA’s contract payment obligations can

compromise case management

The Medical Stop Loss Premium Stabilization Program with second and third year rate caps provides protection against these forces for qualifying clients.

This program is designed for employers who understand the importance of long-term cost reduction strategies

FOR MORE INFORMATION:

WHAT ARE THE BENEFITS TO QUALIFYING EMPLOYERS? » Equal or better terms than in-force policy » More disciplined approach to reducing

long-term medical spend » Three-year budgetable expense » No new lasers in years two and three » Efficient claims turnaround » Power of the collaborative

HOW DOES THE PROGRAM WORK?

1. We and the insurance carrier underwriters will identify clients for inclusion.

2. Each client must commit to the program for three years in order to participate.

3. Clients have flexibility to change coverage elections and provisions each year.

A FORMULA FOR MEDICAL STOP LOSS COST CONTAINMENT

UNDERSTANDING THE PROGRAM’S RATE CAPS

0%In the first year, participating clients receive a 0% total liability from current premiums, as opposed to a 15-22%* market increase.

10%For the second year of participation in the program, each client receives up to a 10% increase from their prior year’s rates on an equivalent policy.

15%For the third year of the program, each client will get up to a 15% increase over prior year’s rates on an equivalent policy.

*Average market increases based on 2010-2012 carrier feedback

Managed Risk + Better

Rates = Long-TermResults