Presented by Insurance 4 Dallas What Laws are Subject to SelfFunded Plans Self Funded plans unlike traditional health Plans are not subject to state laws These plans are governed by federal law through the jurisdiction of the US Department of Labor under the ID: 529548
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Slide1
Self-Funded Plans
Presented
by
Insurance
4
DallasSlide2
What Laws are Subject to Self-Funded Plans?
Self
-Funded plans,
unlike traditional health Plans, are not subject to state laws. These plans are governed by federal law through the jurisdiction of the US Department of Labor under the “Employee Retirement Income and Security Act of 1974” (ERISA). Slide3
Who Issues a Self-Funded Plan?
In most cases, Self-Funded Health plans are issued through
a Third Party Administrator (TPA), which manages a three
prong arrangement consisting of fulfillment of benefits, monthly premium payments and claim transactions which are transparent to the Employer. Slide4
Self-Funded Plan Defined
In summary, a Self
-Funded
Health Insurance plan is an arrangement between: A Health Insurance CompanyA Third Party Administrator
T
he EmployerSlide5
What is the Employer’s Responsibility?
The
Employer
will make regular monthly premium payments to the TPA as they would normally for an insurance policy. However, premium payments will be allocated to three unique financial buckets overseen by the Third Party Administrator. Slide6
T
he “Three Unique Financial Buckets”?
Stop
Loss Insurance FundThe Administrative FundThe Claims Fund
Stop Loss
Insurance +
Administrative Fund +
Claims Fund =
Total
PremiumSlide7
The Employer’s Responsibility
T
he Employer
provides Health Benefits to their employees with the Employer’s own funds, designated or accumulated via monthly premiums to their Claims Fund, one of the unique financial buckets managed by the Third Party Administrator.
Employer’s Claim FundSlide8
Do I Have Refundable Premiums?
In addition, money contributed to the
Claim Fund’s Bucket during
the preceding year is refundable, depending on how much of it was used to pay claims after individual deductibles are used.
Business OwnerSlide9
What is the Employer’s Risk?
The
Employer’s
risk is limited by the amount of money accumulated or targeted by their annual contributions to the Claims Fund ONLY!
Risk ManagementSlide10
How Does Stop Loss Insurance Work?
Medical Bills that accumulate beyond the amount of savings in the Claims Fund, are covered by “Stop
L
oss Insurance” (SLI) premiums. SLI premium is one of the three unique financial buckets and absorbs all additional costs not covered by the Claims Fund.
Stop Loss PremiumsSlide11
How are Medical Claims Paid?
Medical Claims are paid through and managed via a Third Party Administrator, of which the insurance company has issued a contract to manage all of their
Self-Funded
policies. This too is one of the three unique financial buckets paid with premiums.
Third Party AdministratorSlide12
Why Do Self-Funded Plans Cost Less?
All
of the preceding
arrangements combined reduces the overall costs of health insurance to an employer. In addition, unlike other plans issued via the Patient Protection Affordable Care Act (PPACA), these Plans may not include all the “Ten Essential Health Benefits” and
are medically underwritten, which
reduce
costs.Slide13
Unique Features of a Self-Funded Plan
1099 Employees are eligible
Full Time work is 20 to 40 hours per week
Can cover employees at multiple locationsFour Tier Rates Number of Children Impacts RatesSlide14
What is the Maximum Cost on Claims ?
In Addition, ERISA
managed policies mandate
Self-Funded plans not exceed the maximum costs for claims to consumers per calendar year, which is $6350 for an individual and $12,700 for a family (in-network only). This is the same mandate in the PPACA. Slide15
What are the Advantages of a Self-Funded Plan?
May reduce Monthly Premium Costs
May get Premium Dollars Back at the End of the Year
Agents are free to be creative and offer other ways to reduce cost, such as eliminating your deductible. Slide16
How Else May We Reduce Costs?
Ask Your Agent About -
Insurance
4DallasJohn (Rick) Thornton
(972) 219-6004
Mail@Insurance4Dallas.com
High Deductibles
GAP Insurance