Alaska Government Financial Officers Association Presented by: Jeff Ranf VP USI.

Alaska Government Financial Officers Association

Presented by: Jeff RanfVP USI

Health Insurance Solution Using

Captive Risk Pool Presented by: Jeff RanfVP USI

Today’s Discussion

© 2015 USI Insurance Services. All rights reserved. 1

Why don’t more mid-sized public entity employers self-fund?

What is self-funding your benefit plan?

What is a medical insurance captive arrangement?

How can a captive work for Alaska public entities?

Could a group of employers develop their own captive?

Why would you want to do this?


Why DON’T More Mid-Sized Employers Self-Fund?

The cost of healthcare is scary, don’t want the risk

Volatility – Employer costs can vary significantly due to large claims or an aggregation of smaller claims. Or………..

…fearful of the maximum cost.

Fully insured plans are Turnkey.

Off the shelf.

No decisions need to be made.


What is self-funding?

It’s deciding to take control of your benefit program

It’s designing your own plan around your objectives, not the insurance carrier

It’s taking predictable funding risks

It’s avoiding some of the ACA requirements

It’s seeing where all your money is going including claims


What is self-funding?

Employing an experienced claims payer or third party administrator

Purchasing individual / aggregate stop-loss protection

Developing own plan design:

Deductible, coinsurance, co-pays, Rx

Dental, Vision, Travel, etc.

Deciding how YOU want your benefit to look


A Medical Captive Risk Program

Traditional self-funded programs pooling multiple employers’ the stop-loss premium

Sharing risk and rewards with like minded employers

Purchasing health insurance like Fortune 500 employers


A Captive Arrangement

How does it work?

Control---Plan Design, Wellness, Disease

Mgmt.

+ Transparency---Claims & Financial

Data

= Cost Stabilization


How can a Captive work for Public entities?

Employers band together forming their own pool. NOT A MEWA

Utilize regional & national networks

Each group retains own plan designs

Establishing their own stop-loss levels

Pool shares in underwriting profits on a pro-rata basis

© 2013 USI Insurance Services. All rights reserved.

WHY?

To smooth out the renewal volatility

To have more control of your costs

Because cities and boroughs are seeking a better solution

© 2013 USI Insurance Services. All rights reserved. #

How to plans differ?

Fully Insured Plans

100% Fixed Costs

All Services / Options controlled by the carrier

NO Employer Control

Carrier retains all the profits

© 2013 USI Insurance Services. All rights reserved. #


Self-funded Plans

40% Fixed Costs

Employer keeps unspent claims

Employer assumes most of the risk …and realizes control and transparency

Employer assumes their own claim volatility

Avoidance of ACA requirements



Captive

15% Fixed Costs

Employers assumes some risk, shares some risk and shifts catastrophic risk

Transparency: employer control

Employer retains up to 80% of the claim spend

Avoidance of ACA requirements


Other than the sharing underwriting profits…

Solving the volatility issue…

Pooling with other employers….

It looks and feels like your own plan.

The Look and Feel


NOW WHAT?

Usual submission of Info (census, plan design, rates, claims)

Third Party Administrator (TPA)

Benefit Plan Design & Retentions

Stop-loss Levels

Thank youPresented by: Jeff RanfVP USI

Alaska Government Financial Officers Association Presented by: Jeff Ranf VP USI.

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