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22 <br /> 1 • United Healthcare <br /> 2 • WellPath — No Quote <br /> 3 • Of the quotes that we received, only UHC is firm <br /> 4 • The earliest that we will have firm quotes from the respondents is September 2013 <br /> 5 <br /> 6 2014 Fully Insured Quotes (table) <br /> 7 The increase represents a 6.35% increase or $641,000. <br /> 8 <br /> 9 2014 Self-funded Renewal Estimate (table) <br /> 10 If the County transitions to a self-funded arrangement, no increase in funding is required. <br /> 11 <br /> 12 2014 Self-funded Quotes (table) <br /> 13 <br /> 14 Self Funding <br /> 15 Components of a Self-funded Contract <br /> 16 • Hire an administrator to pay claims <br /> 17 • Purchase insurance for large claims (Stop-loss Insurance) <br /> 18 • Hire a network ( doctors/medical specialists/hospitals) <br /> 19 Plus <br /> 20 • Claims <br /> 21 • Reserves <br /> 22 SELF FUNDING FORMULA: <br /> 23 Rates = Administrator + Claims + Stop Loss + Reserves <br /> 24 <br /> 25 Pros of a Self-funded Contract <br /> 26 • Greater Plan Flexibility <br /> 27 • Pricing/premium structure established by the organization <br /> 28 • Overall lower costs over time <br /> 29 - Tax avoidance — State and Federal <br /> 30 • Ability to establish a reserve for the plan <br /> 31 • Easier framework to structure wellness strategies <br /> 32 <br /> 33 Cons of a Self-funded Contract <br /> 34 • If claims come in higher than expected, the organization is responsible for funding the high claims <br /> 35 (Reserve is established for this purpose) <br /> 36 • Plan subgroups (ABC Board and Community Home Trust) are responsible for paying their own <br /> 37 claims <br /> 38 <br /> 39 Pros of a Fully Insured Contract <br /> 40 Total cost is fixed <br /> 41 Cons of a Fully Insured Contract <br /> 42 • Plan Flexibility is reduced because of carrier filings with the State Department of Insurance <br /> 43 • Pricing is set by the Carrier <br /> 44 • Higher Cost over time <br /> 45 Tax— State and Federal <br /> 46 • Wellness strategies are harder to implement, because cost is in addition to premium paid <br /> 47 <br /> 48 Recommendation: <br /> 49 • Transition to a self-funded contract with United Healthcare <br /> 50 - Includes increasing the County's Health Savings Account contribution from $103.10 to $118 per <br /> 51 pay period <br /> 52 • The County will purchase stop-loss insurance to protect against catastrophic claims <br /> 53 • A self-funded plan will provide greater flexibility for wellness strategies <br /> 54 • Lower long term cost by avoiding Health Care Reform and State Premium taxes ($440,000) <br />