mid market medical expense stop loss
TRANSCRIPT
Medical Stop Loss Group Captive
The Standard Market
The Standard Market = Minimal Control, No Transparency
• Unanticipated rate increases
• Burdensome plan marketing
• Available responses– Change carrier
– Change benefit levels
– Change contribution schedule
Today’s annual cost increases will double premium in 6 years
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Average Annual Premiums
13,375
12,680
12,106
11,480
10,880
9,950
9,068
8,003
7,061
6,438
5,791
4,824
4,704
4,479
4,242
4,024
3,695
3,383
3,083
2,689
2,471
2,196
- 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000
20092008200720062005200420032002200120001999
Average Annual Premiums for Single and Family Coverage, 1999-2009
Single
Family
Source: Kaiser/HRET Survey of Employer – Sponsored Health Benefits. 1999 – 2009.
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Larger Employers – Self Fund
Percentage of Covered Workersin Partially or Completely Self-Funded Plans, by Firm Size, 1999-2009
Source: Kaiser/HRET Survey of Employer – Sponsored Health Benefits, 1999 – 2009.
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Why Larger Employers Self Fund
• Control over benefit plan and claims administration
• Complete data and cost transparency
• National plan consistency, no state mandates
• Cash flow benefits (“pay as you go”)
• Custom designed best in class wellness/behavioral programs
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Why Don’t Mid-Sized Employers Self Fund?
Volatility – Employers’ costs can vary significantly dueto large claims or an aggregation of smaller claims.
Turnkey Program – Running a self insurance programcan be intimidating. Plan design, TPA/Network selection,stop loss contract negotiations.
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Captive Definitions
Captive
An insurance company that provides insurance to and is
controlled by its owners.
Group Captive
A group captive is an insurance facility formed by companies
joining together to share risk. Each have a desire to control
their own risk. Member companies maintain good loss
histories and effective risk management programs.
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The Captive Difference
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Traditional vs. Captive Market
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Traditional vs. Captive Market
Group Aggregate for Captive
Aggregate available for Participant’sDeductible exposure
Policy Loss Limit
$500,000
Amount Specific Deductible
$0
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Association Loss Application
The Hierarchy of Loss Application
1. Losses shared Pro Rata of each Participants Assumed Premiums
2. Then, the Pro Rata Collateral of all Participants’ proportional with their Assumed Premiums.
3. Aggregate Reinsurer
*Individual employer aggregates can be reinsured via the Group Captive layer
Proportional Share of All Participants’ Loss Fund
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1
Proportional Share of All Participants’ Collateral
Aggregate Reinsurer
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Start Up Considerations
• TPA/Network Selection
• Deductible Levels
• Employer Aggregate Issues
• Wellness/Behavioral Programs
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Underwriting Guidelines &Submission Requirements
Underwriting Guidelines• 50+ lives• Minimum of $20,000 deductible• Support culture of health and wellness
Submission Requirements• Completed application or RFP outlining criteria• Current detailed census• 3 years stop loss premium and detailed claims history• Copy of current policy• Copy of the current plan accompanying documents• Identity of the current and/or proposed TPA
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Roundstone826 Westpoint Parkway, Ste. 1250
Westlake, Ohio 44116
440.617.0333mesl@roundstoneinsurance.comwww.roundstoneinsurance.com
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