Partially Self Funded Medical Insurance (Shared Funding)
Electricsupply
3 Posts
Has anyone ever heard of a company called Barrett Benefit Group out of Orange Village, Ohio? They have created a health insurance concept called Shared Funding. The shared funding concept was estimated to save us anywhere from 10% - 25% on premium costs. We are somewhat hesitant to move forward with this program because everyone else we asked (local brokers) had never heard of the concept. Has anyone else heard of this type of concept?
These are some of the highlights to the program they sent me.
SharedFunding is a partially self funded solution that complements a fully insured product. SharedFunding serves to cushion deductibles and is designed to reimburse only for items covered by the insurance policy that it complements. It's a safe and innovative approach that can result in considerable savings while still delivering a strong benefit package. It places some control of health benefit costs back in the hands of the employer.
Due to the fact that it is a fully insured plan, there is a well-defined maximum reimbursement amount, often referred to as a defined contribution, for each covered individual or family. In the event of high cost cases (e.g. complicated birth, major surgery, chronic conditions, catastrophic injury or illness, disease, etc.,) the employer¡¦s reimbursement exposure for any given case is capped. Thanks!
Comments
I expect that being even partially self insured brings the totality of HIPAA to your doorstep.
I've never heard of this before. HRforME?
Our broker approached us with something similar this year. We would purchase a plan that had a $1000 deductible for instance and give the employee a plan that had a $300 deductible. Thus self funding the difference of $700. Since so few people reach their deductible (especially if your company has a young age range), you save the self funding difference. Looking at the numbers, it seems like a good way to go if you are a small company. The claims are handled by a TPA, so you have an administration cost as well. Since the TPA is handling the claims, you should not run into a HIPPA problem. <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
If you are bringing on a new insurance line, say vision for example, our broker said that you should wait a year before self funding. For one, the usage of a new product is high and you don’t have a good picture of the claims rate until you have a year or two for study.
We decided to wait a year and see the claims numbers before going this route, but we are looking at it.
We did something like this (on our own) in 2007. We raised the deductible per person from $1000 to $1500. Family went up also. We "funded" any difference between $1000 and $1500 (up to 3 family members) and paid it out as taxable income when the employee brought an EOB showing they had met the deductible increase (they could print it out via the insurance claims system where it showed NO claim details). We handled it all in house through payroll so there were no extra administration costs.
We only had 4 employees/dependents who met that deductible difference in 2007. The savings in plans for the year was about $40k in premiums. So it worked for us in 2007. But in 2008 analysis, the premium savings just wasn't there as our insurance company raised rates on the $1500 plan by 24%!
Being small group rated, we get NO data on actual claims -- not how many, no total cost, no # on deductible usage/met. But I did a quick poll of our 20 employees to see how many hit the 2006 deductible, but of course prior historical usage is not always the best predictor of future usage. So it was taking a risk, but when analyzing 100% utilization of the $500 kickback, we would have lost...but anything under about 80% would have been equal or better.