Minutes 09-05-2013 - Laserfiche WebLink

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• BCBSNC • CIGNA • First Carolina Care — Declined to Quote • MedCost— Declined to Quote • Municipal Insurance Trust— Self-funded Only • United Healthcare • WellPath — No Quote • Of the quotes that we received, only UHC is firm • The earliest that we will have firm quotes from the respondents is September 2013 2014 Fully Insured Quotes (table) The increase represents a 6.35% increase or $641,000. 2014 Self-funded Renewal Estimate (table) If the County transitions to a self-funded arrangement, no increase in funding is required. 2014 Self-funded Quotes (table) Self Funding Components of a Self-funded Contract • Hire an administrator to pay claims • Purchase insurance for large claims (Stop-loss Insurance) • Hire a network ( doctors/medical specialists/hospitals) Plus • Claims • Reserves SELF FUNDING FORMULA: Rates = Administrator + Claims + Stop Loss + Reserves Pros of a Self-funded Contract • Greater Plan Flexibility • Pricing/premium structure established by the organization • Overall lower costs over time - Tax avoidance — State and Federal • Ability to establish a reserve for the plan • Easier framework to structure wellness strategies Cons of a Self-funded Contract • If claims come in higher than expected, the organization is responsible for funding the high claims (Reserve is established for this purpose) • Plan subgroups (ABC Board and Community Home Trust) are responsible for paying their own claims Pros of a Fully Insured Contract Total cost is fixed Cons of a Fully Insured Contract • Plan Flexibility is reduced because of carrier filings with the State Department of Insurance • Pricing is set by the Carrier • Higher Cost over time Tax— State and Federal • Wellness strategies are harder to implement, because cost is in addition to premium paid Recommendation: • Transition to a self-funded contract with United Healthcare