FAQ’s for Brokers and Employers
A. The actuary/underwriter has evaluated the risk based on plan design, risk factors, and risk pool demographics.
A. Two reasons – the higher benefit requires additional funding for the employer’s claim account plus the Aggregate Stop Loss Fund (ASLF) must be increased for the risk to underwrite the higher benefit liability.
A. The plan is an ERISA partially self-funded plan with fixed costs and claim account funding dollars. Premiums are paid monthly – either on the 1st or 15th depending upon the ACH instructions.
A. The total liability is the monthly premium which is comprised of fixed cost and the claim funding. The employer is responsible for paying the monthly fixed and claim account funding although the employee may be required to contribute a portion of the monthly cost. The employee/patient is also responsible for paying their portion of the coinsurance of the benefits based on the plan selected.
A. The employer will receive 100% of the claim account fund surplus dollars at the end of the 12- month period plus the 3-month or 6-month runout period.
A. Not necessarily – the employer (plan sponsor) may retain their conventional Delta Dental program or any other dental plan. Direct Dental Plans of America (DDP) offers a discount dental and vision program. As a plan sponsor, you may find that the value of DDP’s discounted program is a terrific option and can use the Delta Dental’s premium to benefit employees in other ways, i.e. lower contributions or a wellness program.
A. Each SB/A CoOp Employer Member has its own Employer Freedom Plan funded claim account maintained by RCI, Inc., the Plan Administrator. The Employer’s maximum claim liability is limited to the 12-month level funding of its claim account. The Member Employer owns the funds and will receive 100% of any surplus following the Plan Year runout at the end of the 15th or 18th month.
A. Simply explained, health care insurance premiums are based on:
- The price/cost of healthcare services, drugs, and medical devices
- The “number of” (“or acceleration growth of”) of healthcare services, drugs, and medical devices
- Administrative and risk cost to process and oversee the management of a healthcare program
- Plan design that allocates cost sharing by the patient, i.e. deductibles, coinsurance, and out-of-pocket limitations
In America, the cost and utilization are increasing every year:
- Healthcare services, drugs, and medical devices are increasing annually between 6% to 11% per year
- The number of healthcare services, drugs, and medical devices are increasing 2% to 5% annually due to medical advancements, new “blockbuster” drugs, and medical technology
- On average, the health status of Americans is eroding due to increasing chronic conditions related to age, obesity, and lifestyle. Many of these chronic conditions are changeable or treatable with diet, exercise, and maintenance medications.
A. The Employer Freedom Plan is an ERISA partially self-funded plan with fixed costs and claim account funding dollars. Stop loss is a risk transfer contract that limits the liability (or “stops the loss”) of the healthcare expenses – usually for the employer (plan sponsor).
The SB/A CoOp has established an Aggregate Stop Loss Fund (ASLF) to cover healthcare claims through the purchase of a stop loss contract and/or payment of claims above the employer’s liability.
A. Hospitals, physicians, medical device manufacturers, pharmaceutical manufacturers, and many other health care providers will create a list detailing the official rate charged an individual for procedures, services, and goods. The chargemaster is used to generate each invoice based on the service provided. Insurance companies and “preferred provider organizations (PPOs)” will negotiate discounts or reduced prices off the chargemaster that is ultimately used in determining health care expenses of a medical plan.
A. ERISA stands for Employee Retirement Income Security Act. It is administered and enforced by three bodies: Labor Department’s Employee Benefits Security Administration, the Treasury Department’s Internal Revenue Service, and the Pension Benefit Guaranty Corporation. ERISA protects the interests of employee benefit plan (retirement, health, and welfare) participants and their beneficiaries. It requires plan sponsors to provide plan information to participants and establishes standards of conduct for plan managers and other fiduciaries. ERISA does not require employers to establish benefit plans and it does not require that plans provide a minimum level of benefits. Instead, it regulates the operation of a benefit plan once it has been established. ERISA preempts all state laws that relate to any employee benefit plan, with certain, enumerated exceptions.
A. Regional Care Inc. (RCI) administers the Employer Freedom Plan medical benefits on behalf of the SB/A CoOp’s members. RCI is a Third-Party Administrator (TPA) headquartered in Scottsbluff, Nebraska. RCI serves over 200 employer clients with members in the lower 48 states. RCI has teamed up with best-in-class business partners, from leading PPO networks in each geographic area, to care management companies, telemedicine providers, and transparency tools – all the components needed to manage costs and provide a great member experience. RCI has been in business for over 25 years, is recognized nationally as a premier independent third-party health plan administrator, and resides under the umbrella of Regional West Health Services, western Nebraska’s largest provider of health care services.
Serve You Rx administers the Employer Freedom Plan pharmacy benefits. Serve You Rx has been in business for over 30 years and remains an independent, privately held, full-service Pharmacy Benefit Manager (PBM) with a nationwide network of over 66,000-member pharmacies. Serve You Rx’s services, technology, and pharmaceutical pricing contracts are considered the be the best in the industry.
A. The Employer Freedom Plan primarily utilizes the FirstHealth PPO network for the medical services. Our belief is that the best network is not the one with a 2% discount advantage; it is one that:
- Offers extensive patient access to network providers
- Offers competitive or lowest actual dollar pricing – not stated discounts
- Excludes or minimizes contract language default pricing
- Utilizes best-in-class providers based on treatment outcomes
- Serve You Rx is the full-service Pharmacy Benefit Manager (PBM) and has a nationwide network of over 66,000-member pharmacies that includes major national and regional retail chains and independent pharmacies.
A. ERISA specifies information that must be included in the Summary Plan Description (SPD). The summary plan description must accurately reflect the contents of the plans. The SPD is an important document that tells participants what the plan provides and how it operates. It provides information on when an employee can begin to participate in the plan, how service and benefits are calculated, when benefits becomes vested, when and in what form benefits are paid, and how to file a claim for benefits. If a plan is changed, participants must be informed, either through a revised summary plan description, or in a separate document, called a Summary of Material Modifications (SMM). SPDs and SMMs must be given to participants free of charge.