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Home My WebLink About02/11/2014 Council Presentation - Self Funding insurance� � � � � _. �__� _ � .__ _ . �" � �l 1 � � � � � ��1�' � �lf`�'� �� 1�. � � ��ir��. a��c� � . . . � verview: a is se - u n i n. I- n in rm i I I ni h n in h w h I ni n Se u ou e ca a saca e te a te a su e �v p � v p � . . . . . R h r h n in ix r mi m h in r n rri r h T wn ateta a a e e u tote suaceca e te o pv � p � will n I im n iliz i n in rr h u et a a c a s cost ase o ut at o as cu e t e � pv v artici ants p p � Thi h n will n im h m I r m ' s c a e ot a ct t e e o ees o a I n r rr� r g p p y p a o ca e sta n o i nt p CIGNA still a ears on ID cards and a s claims pp p v N o i m a ct to C I G N A's n etwo rk of d octo rs p N r ir In hn hn in nin o e u e a c a es u e to c a e u q p � � � ��ll�� '�°r��3�it ��3r�.fi��g�, ��c:. • • e- u n e vs. u nsu re — us ra ive om a rison 100% 90% 80% 70% 60% � 3 .� L 50% a � 0 a 40% 30% 20% Fully Insured vs. Self-funded 100% _ i � ig� 90% 80% 70% ' 60% � 3 .� � 50% a � 0 a 40% 10�o Pooling -10% � Retention -10% Retention - 6% o io Fully Insured Self Pre-PPACA Cost Comparison (2013) 30% 20% 10�o Pooling -10% � Retention -10% Retention - 6% o io Fully Insured Self Cost Comparison with PPACA (2014) Notes & Assumptions Retention - Risk charge if insured; adminstrative costs if self-funded. Assumes 2% insurer fee, expected range in 2014 is 2% - 3%. '��lll��r��i I��il+��lC ��1 ]il�. Fully Insured vs. Self-funded O OSS Sto Loss i nsu ra nce is com mon a n p � recom men e— two orms: � Individual Sto �oss p Limits plan claim costs paid on behalf of an individual during the plan year Insurance carrier assumes risk beyond individual Stop �oss level th reshold �� Premium is function of risk per claim that is retained by the Town: ■ �ow individual Stop �oss threshold = Higher Premium (greater carrier risk) ■ High individual Stop �oss threshold = �ower Premium (greater Town risk) I nsu ra nce responsi ble for tota I a m o u nt ove r threshold Marana liability $175,000 claim $75,000 ��Il��r ��n�fi� �er�i�:e�, I��c. O OSS A re ate Sto Loss rotecti o n �� p p ■ �imits lan claim costs aid for the overall p p rou i.e., creates a maximum liabilit for the � p y Town ■ Insurance carrier assumes risk be ond v a re ate Sto �oss threshold �� p �� Aggregate claims are net of any individual stop loss reimbursements Insurance carrier responsible for amount over 125% of expected Maximum liability Claims > 125% of expected Agg. corridor 25% ��Il��r ��n�fi� �er�i�:e�, I��c. • • ercen a e o covere wor ers i n a r ia or com e e . . . . se - u n e a ns i rm size re ion a n i n us r > > Firm Size 200-999 wo rke rs All Large Firms (200+ workers) Re ion - West g Industr — State local Government y 58% 83% 47% 78% (1) Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2013. (2) Estimate is statistically different from estimate for all other firms not in the indicated size, region or industry category (p>0.05). ��ll�� r��3�it "��3r�.fic�g�, ��c:. • • ene i s o se - u n i n Cnrl Ixiili In in o t o e t o a es y p � AI lows for more custom ized ta i lored la n desi n � p � � Better ali ns fundin with wellness and o ulation health mana ement � � p p � strategies Allows for inte rated artnershi with Marana Health Center � p p B r m r im I I im ette o e t e a ccess to c a s ata y cost Miti atesmar inal riskand rofitchar esinherentinfull insured remium � � p � Y p Im roved cash flow and interest earnin s p � Avoids health insurer fee under Health Care Reform ��ll�� n�3�it "��,�ic�g�� 1��r�. • • • • e consi era ions— isca oversi Pr n vrih I-n In h u e t o e s t o se u e a s su ests t at a e uate � p �� a m i I n r rv li h n m in in e ca u ese es e esta s e a a ta e � . �� M i I n r rv r • e ca u ese es a e use to. ■ Antici ate fund un aid claims ex enses in the event of lan termination p p p p ■ Offset unex ected claims fluctuation in a iven ear p � v M i I n r rv il - will in I in h I- n e ca u ese e u u e c u e t e se u e p m i I r' i n n h r r n r I n n- e ca u et o ect o s a t e e o e oes ot e o o e �p� � v ti me i n usion ■ Town can a I M�R rebate funds from rior ears to ppv p v com lement accelerate medical fund reserve build-u p p M i I n r rv m in in hr h r ri li n e ca u ese es a ta e t o u a o ate o c a � pp p p Y nn I ' m n wi hin r - in r a ua a ust e ts t ate sett ocess J �p ��ll�� '�°r��3�it ��3r�.fi��g�, ��c:. • • ��11��R ��n�fi� �er�i��, I��c.