Why Self-Funding?

Insurance is one of those costs that just keeps going up and up… At some point, you have to get creative. -- Entrepreneur Magazine

Self-funding group health coverage makes sense for small to mid-size employers who: Have a healthy workforce Would like to take a more active role in managing their group’s healthcare costs Are willing to take on limited risk for their group’s healthcare claims Are ready to think out of the fully-insured healthcare coverage “box”

Why does it make sense for small to mid-size employers to consider self-funding– when this has traditionally only worked for large employers? Numerous PPACA mandates resulted in significantly higher rates for many healthy groups– so high that the money spent on premiums could far exceed group claims.

Cost Advantages of Self-Funding Healthcare Coverage Certain PPACA taxes and fees are charged only on insured premium– collected only on excess loss insurance premium in a self-funded program rather than the total premium of insured coverage. Potential savings on taxable premium: 1.5% to 3% Underwriting is still allowed as a rating method for excess loss insurance within a self-funded plan. Potential savings for select groups on insured premium: 31% An estimated 50% of groups have annual claims which fall below the claims reserve account balance. Potential savings of unspent claims reserve account funds: 35%

How is small group self-funded healthcare coverage usually structured? A small group self-funded health plan usually consists of administrative services, funding of a claims reserve account and excess loss insurance coverage, bundled into a packaged solution.

Administrative Services— What is usually included? In most cases, employers electing self-funded coverage employ a Third Party Administrator (TPA) to provide services and resources which cover day-to-day administration of the health plan, including: Employee enrollments, eligibility and billing ID cards, EOBs, and ongoing communications Claim processing and payments Account management and customer service Coordination of benefits and subrogation Plan analysis and reporting Negotiation of network access fees

The Claims Reserve Account As Plan Sponsor of the self-funded group healthcare plan, the employer funds an account from which qualified employee medical claims are paid. In the typical scenario, the TPA is authorized to make claim payments from this fund.

Financial Protection for the Employer: Excess Loss Insurance Coverage Employers self-funding their group medical coverage gain protection from spikes in claims, or “shock claims,” by purchasing excess loss insurance coverage. This coverage is offered in various forms, the two most typical being specific excess loss insurance coverage, which protects against unexpected claims incurred by an individual member; and aggregate excess loss insurance coverage, which protects against high total claims for the overall healthcare plan.

Tips on Selecting a Small Group Self-Funded Health Plan A wide range of options exist for the small to mid-size employer seeking self-funded health coverage. Several key issues should be considered when making a selection: Experience and qualifications of the TPA Size and professionalism of TPA staff Bundled v. unbundled– i.e. TPA services and excess loss insurance coverage provided by a single source v. multiple sources Network strength and provider discounts Quality of coverage Accessibility

SafeGuard Offers an Ideal Fit Extensive TPA experience and a large staff of experts Same-source health plans, excess loss insurance coverage and administration Major Preferred Provider Organization (PPO) memberships and significant discount schedules Proven health plans Open formulary Rx coverage accepted nearly everywhere Service wherever and whenever needed via live operators, and 24/7 online and electronic resources

For additional information on SafeGuard, select an option below: Speak with a Sales Representative Contact USHL Sales Support at (844) 828-5968 or send an email to SalesSupport@ushealthandlife.com Learn more about SafeGuard http://www.ushealthandlife.com/Find-a-Plan/Medical/SafeGuard Review SafeGuard Benefit Summaries http://www.ushealthandlife.com/Find-a-Plan/Medical/SafeGuard/Benefit-Summaries Review Frequently Asked Questions http://www.ushealthandlife.com/Portals/0/Documents/SafeGuard/SafeGuard_FAQs.pdf Obtain a Quote http://www.ushealthandlife.com/Find-a-Plan/Quotes-from-USHL/Get-a-Quote#SafeGuardQ Excess loss insurance policies and PPO insurance plans underwritten by US Health and Life Insurance Company, Inc.  SafeGuard plans administered by US Health and Life Insurance Company, Inc. © 2017 US Health and Life Insurance Company, Inc. All rights reserved.

Why Self-Funding?