How To Beat The High Cost Updated

Here’s How to Beat the High Cost of Health Care:

The “Simple Option Solution” SOS

(c) 2010, ClaimLinx, LLC. All rights reserved. ClaimLinx2

Health Care Spending Comparison

A. Total Health Spending 2007 (Centers for Medicaid & Medicare Services) 1. $2.2 trillion

B. 2005 Salary + Bonus:Insurance Carrier UHC CEO 2. $1.4 million

C. 2005 Spending:U.S. Military Defense Budget 3. $400 billion

D. 2006 US Spending :www.kff.org – Prescription Drug Trends 4. $216 billion

$124.8 million


Family Premium Costs

$9,160$9,950

$10,880$11,480

$12,100$12,680$13,375

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

2003 2004 2005 2006 2007 2008 2009

Source: Kaiser Employer Health Benefits


Americans Are Suffering

2005 USA Today, the Kaiser Family Foundation, and the Harvard School of Public Health

28% say there have been times in the past year where they didn’t have enough money to pay for medical care

19% say their strategy to lower costs is to resubmit a health care claim that hasn’t been paid the first time

71% believe the increase in cost is due to health profits by drug companies and insurance companies.


Employer- Provided Coverage Options

Full Coverage (High Premiums, High Benefits) Cost-Share Coverage (High Premiums, minimal

employee exposure to true cost of services) HSA – Health Savings accounts (Low premiums

with Employer Prefunding)


Full Coverage – High Premiums

Policy LifetimeMaximum$5,000,000 +

Employee out of pocket $ 0.00

Very HighPremiums Paid by

Employer or split with EmployeeCarrier Pays

costof all

Medical services


Cost-Share Coverage

Carrier Pays cost of Medical

services once deductible has been met and

amount in excess of

copays

Employee Pays first up to deductible

Policy LifetimeMaximum$5,000,000 +

PPOEmployee Deductible $1,500/$3,000

$20/$50 co-pays$10/$20/$40 prescriptions

Premium Costs remain high

But are lower than 100% coverage

Plans


HSA – Health Savings Account

Policy LifetimeMaximum

$5,000,000 +

HSA product Employer Pre-funded

Max out of pocket $5,000/$10,000

Employee and Employer some or all out of pocket

Lower Premium costs Carrier PaysFrom HSA deductible

Up to LifetimeMaximum

Employee Pays with Pre-funded

dollars

EmployerPre-funds a

portion of the benefit


What is another Option?


SOS Program

1. Raise Deductible on Major Medical Plan

2. Buy Back Benefits with Section 105 – NOT Pre-funded

3. Additional Options – even lower costs to employers

4. Design your own plan!


1. Raise Base Plan Deductible

Old Plan – High Premiums– $ 0 EE Deductible– 20% EE coinsurance– $ 20 EE Office Visits– $5 Mil Policy Maximum

New Plan – Low Premiums– $ 0 EE Deductible– 20% EE Coinsurance– $ 20 EE Office Visits

$5,000 – HSA Base Plan

35% Savings!

Same Benefits


Define Eligible Employees Must be nondiscriminatory May use “classification” test:

– “all participants in Employer’s group health plan”

“Safe harbor” exclusions:– Less than 25 hours/week– Less than 7 months/year– Less than 3 years service– Age 25 or under

Define/Deliver Benefits Define eligible expenses

– Copays, deductibles, Rx

– Diagnostic/testing– Dental/vision/chiropractic– “Any eligible expense under

IRC Section 213(d)”

Add §105(b) to deliver benefits 2. Buy Back Benefits


3. Additional Options

Alternate Funding – pull off spouses and dependents

for lower individual rates

Institute a “Spousal 105” – redefine eligibility to avoid double-coverage; reimburse with 105 (include Medicare)

Implement self-funded dental and self-funded vision programs to decrease premium expenses


Client Example

Before – per month

$20,000 major medical

$20,000 total

After – per month

$12,000 major medical

$ 1,000 §105 allowance (module)

$13,000 total

Manufacturer10 Employees – single20 Employees – with family

$7,000/Month Savings


“SOS” Summary

Keep the Same Carrier Provide the Same or Better Benefits Save 10% to 80% on Costs Restructure Finance of Benefits Create instant Cash Flow Personal Administration for Employees Customized Flexible Benefit Design Ongoing Member Education


Feature §105 HSA

Benefit?Limited only by

Employer

Limited to major-medical

deductible

Eligibility?Defined by Employer

May be limited

Pre-funding? Not required Required

Portable? NoneFully VestedAnd Portable

§105 vs. HSA


Reimbursement Process

Before After

Employee shows 1 card at service Employee shows 2 cards at service

Provider submits bill to Insurer Same

Insurer determines coverage Same

Insurer reimburses Provider Same

Insurer submits EOB to Employee Same

Provider or Employee submits EOB to ClaimLinx

ClaimLinx determines 105 benefit

Employer pays 105 benefits to ClaimLinx

ClaimLinx pays providers

Employee pays balance Same


ClaimLinx Services

60+ years experience Refunds & Rebates In-House Consulting Live toll-free Customer Service Customized Benefit Designs Claims Analysis & Reporting


60+ Years Experience

Christy A. Quigley, President/Owner – prior employer Anthem Blue Cross & Blue Shield – 14 years, Marketing & Analysis

Thomas J. Quigley, National Sales Consultant – owned agency – 14 years

Edward Lyon, President Taxcoach – tax attorney & consultant – 20 years

Erika DeStefano, National Sales Director – prior employer Deloitte Consulting and Assurant Health – 15 years


Refunds

Double coverage (i.e Spousal, Military, Medicare)

Provider billing errors Duplicate claims billing Subrogation funds on auto accidents,

worker’s compensation or AD&D claims


Rebates

Prescription Drugs for PBM Plus brand Checks issued quarterly Pays for most of administration costs


In-House Consulting

Thomas J. Quigley, National Sales Consultant– Savings Projections – 5 years– Yearly Consulting Assistance– Benefit Plan Design & Analysis– Claims review

Sonia Smith, Director Consulting/Client Services– Personalized Account Management– Service Coordination

Erika DeStefano, National Sales Director– National Sales– Benefit Plan Design and Analysis– Referral Generation


Live Toll-Free Customer Service

Personal Account Assistance Claims processor relationship Secure web-portal for administrators Quick claims resolution 24-hour response time Hands on education


Customized Benefit Designs

Keep same benefit design Provide same or “better” benefits Provides cash flow management No pre-funding required Easy renewal plan changes Free enrollment meetings


Claims Analysis & Reporting

Employers can make informed decisions based on claims data

Renewal negotiations made easy Data analysis from experienced

professionals Industry comparisons


Questions and Answers

Are you Ready to Start Saving Money?


Next Steps

Installation Fee and Document Current Plan Design Base Plan Implementation Enrollment Census Enrollment Meetings Ongoing Member Education

How To Beat The High Cost Updated

Documents

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