Alternative Insurance Resources, Inc. has experience in the design and management of self-funded medical and dental plans. While self-funding is not for everyone, self-funding through AIR can be profitable to employer groups as small as 50 employees.
We put all of the components in place:
- Design of benefits
- PPO Network(s)
- Stop Loss Coverage (Reinsurance)
- Managed Care Components
- Pharmacy Benefit Program
- Wellness Initiatives
- Employee Communication
Advantages of a Partially Self-Insured Program:
Under a self-funded plan, a client can design their program to fit the unique needs of its organization within certain limitations.
When plan changes are appropriate, the client can make targeted changes to meet a particular need without having to totally change plans, as is the case in most fully insured plans.
The AIR Advantage:
Using AIR as administrator, the group is not limited to a short list of standard “off the shelf” plan designs common to most larger TPAs and insurance carriers.
We are very flexible in the design of your plan giving you more control over the benefits (and their costs) that best fit your unique organizational needs.
Lower Costs – Improved Cash Flow:
Under a fully insured plan, premiums are payable in advance, premium costs include hidden administrative costs, premium taxes, commissions, and underwriting profits.
In years where claims experience is favorable, the carrier keeps the profit.
From a cash-flow perspective, premiums are payable in advance each month. In a typical plan, the employer has paid claims costs well in advance of the time it takes for the insurance carrier to receive, process, and pay the claim.
The AIR Advantage:
With a self-funded plan administered through AIR, administrativecosts are lower and specifically identified. Premium taxes are significantly lower (and included in stop loss premiums) and, most importantly – Underwriting profits accrue to the benefit of the employer – not the insurance company.
From a cash flow perspective, only the fixed costs (administrative and stop loss premiums) are paid in advance. Claims costs are only paid after the TPA has received and processed the claim.
In a fully insured plan, there are few options for renewal at the end of the year. If plan experience is not favorable, your carrier will probably increase rates – regardless of the reason for the experience. Then . . . .
If renewal terms are not favorable you may:
- Move to a lower cost “off-the-shelf” plan offered by the same carrier; or
- Change insurance Carriers – with new plan design, new ID cards, new phone numbers and possibly a new PPO provider list, etc.
- Fully insured carriers typically underwrite retrospectively – to recover their losses
The AIR Advantage:
One of the biggest advantages of self-funding through AIR is what happens at the end of the policy year.. In the event of a favorable plan experience:
- A detailed evaluation of plan experience may reveal a condition or a claim that is non-recurring – leaving no reason for any changes;
- If plan design changes are needed, we can make design adjustments targeted at the cause of the negative experience without turning the entire plan upside down;
- If stop loss terms are not favorable, AIR uses a number of carriers where rate terms can be compared and competition will yield the best possible results. In the event we recommend a changein the stop loss carrier – the move is transparent to plan participants (same ID card, same administrator, etc)
Plan Design Considerations:
Whether you favor a copayment based plan, the old “Deductible then 80/20” plan, or one of the newer Consumer Driven Health Plan alternatives, one of the advantages of self-funding through AIR is the almost limitless number of plan design options that we can design and administer on your behalf.
Copayment based plans – Physician’s office visits with a copayment (we can distinguish between primary care and specialists if needed). Copayments for pharmacy – generic, preferred brand, and non-preferred prescriptions;
Coinsurance based plans – For employees who have lost touch with the “real cost of healthcare”, consider a plan that pays 67% for all benefits with a $2,000 out-of-pocket maximum with or without a calendar year deductible.
Triple Option Plans – We can build a plan that favors a particular hospital or physician’s group, with a second tier of benefits for PPO providers, and a third tier of benefits for non-participating providers;
Wellness Initiatives / Physician or Nurse on Site: For employers with more than 250 employees in one geographical location, we can design a plan that provides motivation for participation in wellnedd initiatives designed to drive down chronic health-care costs.
This is YOUR plan. We encourage our clients to be active in the development of a plan design that best meets the unique needs of the organization.