Mark Gaunya, Dean Bushey & Lisa Byzcko
Transcript of Mark Gaunya, Dean Bushey & Lisa Byzcko
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Presented by:
Mark Gaunya, Dean Bushey & Lisa Byzcko
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Meeting Objectives
• Introductions
• Managing the Risk
• Program Highlights
• Program Partners
• Feasibility Analysis
• Action Steps and Timeline
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Where it all began…
✓ Borislow Insurance Founded in 1982
✓ Headquartered in Boston, MA
✓ 65 employees, UBA member firm (142 firms)
✓ Strategic Advisor to:
✓ 100+ independent schools
✓ Program Manager for Captivated Health
Market Dynamics & Client Collaboration
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Corporate Structure
Design-to-build
Strategic Benefits Advisor
Exclusive
Community
Serving a wide range of education
and commercial clients
Serving the education and engineering
sectors
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Captivated Health Education Since 2014
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Business OfficeEngaged Model
Business OfficeTraditional Model
Exclusive
community of
schools building
holistic cultures of
health & wellbeing
Cost & Complexity
2nd largest budget
item, grows faster &
more complex
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MemberTraditional Model
MemberEngaged Model
When healthcare
happens, the
member is in
control of choices
& gets reliable
help
Transparency of Price & Quality
When healthcare
happens, the
member isn’t in
control of choices
& gets little help
Concierge
Service
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Managing The RiskWhy, how, and what it means
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When you are fully insured
you don’t know what you don’t know.
So, you are unable to make
intelligent and informed decisions.
Risk Management Challenge
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Carriers have modest, but
consistent net profit margins
Manage to margin, no real desire or need to manage costs
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81.8¢
6.3¢11
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What would you do if
you could build
your own insurance company?
THE question
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Guiding Principles
1
2
3
4
Members First
Consumerism
Health & Wellbeing
Governance
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Members First
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Consumerism: Tools,
Resources and Support
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Member Tools, Resources
& Support
Just TAP the APP
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Health & Wellbeing
Physical
Financial
Workplace
Community
Mind-Spirit
Culture of
Health
& Wellbeing
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Governance
Chairperson
Engagement committee
Finance committee
Governance Committee
Membership Committee
Vice Chairperson
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Change your financing to
change your future
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THE INSURANCE
COMPANY
RISK Transfer
PREMIUM Pay (includes tax and
insurance company
profits)
DATA Little or none
TREND Higher
CONTROL None
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THE INSURANCE
COMPANY
YOUR INSURANCE
COMPANY
(Partially Self-funded)
RISK Transfer Assume, Share, Transfer
PREMIUM Pay (includes tax and
insurance company
profits)
Pay claims, administrative
costs
and premium (keep any excess)
DATA Little or none Full access
TREND Higher Lower
CONTROL None Full
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Self-insurance among small to mid-sized
employers is increasing (+20%) in recent years
Employers with fewer than 100 employees:
Self-insurance up from 11.9% to 14.2%
between 2011-2015
Employers with 100-499 employees:
Self-insurance up from 25.3% to 30.1%
between 2011-2015
Employers with more than 500 employees:
Self-insurance remains above 80%
Source: Employee Benefit Research Institute (EBRI)
Market
Trends
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Opportunity
Captives Outperform Commercial Insurers
July 30, 2019: Rated U.S. captive insurers continue to outperform the broader
commercial insurance market, and as several business lines see hardening rates,
company boards are undoubtedly looking at captives as part of their risk
management strategy, ratings agency AM Best Co. Inc. said in a report issued
Monday.
This trend is particularly apparent in health care, “as companies look to
captives to help them improve overall health of their workers and reduce
medical costs”…..
“These strong results are testament to the segment’s (captives) close
alignment of interests with stakeholders and deeply ingrained risk
management culture”
Business Insurance, Claire Wilinson, posted July 30, 2019
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TRANSFERfixed costs(insurance)
RETAIN
self-funded retention
(claims below spec.)
SE
VE
RI
TY
Traditional Partial Self-Funding
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TRANSFERfixed costs - Insurance
Individual Claims above $260,000
SHAREgroup retention - captive layer
Individual Claims Paid up to $260,000
RETAIN
(claims below spec.)$35,000 Deductible (Per Member up to Max Claims)
SE
VE
RI
TY
Captive Financing
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Plan Sponsor Tools
• Deerwalk Claims Analytics• Uses claims data on an individual or aggregate
level
• Provides insight into where and how money is
being spent
• That insight yields actionable intelligence to
create disease-specific programs, employee
education initiatives and more.
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• Integrated DPC care that gives every
member an on-demand primary care doctor
for day-to-day illnesses and injuries
• Creates a medical home for members
• 350 Terms and Conditions
• Fees Paid by PBM
• Pharmacy Spend - $7,829,211 Past 12 Mos.
• Anticipated Savings of 15% over 3 years
• Governance Oversight
Plan Sponsor Tools
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Members tools
• AmWell• Telemedicine on-demand via smartphone app
• Small co-pay – big convenience
• $69 Office Visits
• $65 Nutrition
• $85 - $99 Behavioral Health
• Amino• Help employees find the best and most cost-
effective primary, specialty, hospital and urgent care
• Web-based, on-demand, 24/7/365
• Captivated H• Members call one number for any pre or post-claim
questions and for help with all of their tools
• Smartphone app• Connect with plan information, all tools, or call the
Concierge to ask questions and get connected
Resources at your
fingertips
when healthcare
happens to you
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Program Performance,
Key Partners and
Coming Attractions
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95% $1.2MRetention over
5 year
life of program
(70% norm)
Saved by
special Rx and
outpatient
programs
Control and Financial Stewardship
17% $4.4MBetter stop loss
performance than
traditional stand-
alone plans
Projected 3-yr
savings on
prescription
drugs with PBM
carveout
WE
MEASURE.
WE
IMPROVE.
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Networks & TPA Partners
• Aetna
• Cigna
• United Healthcare/Harvard Pilgrim (NE)
• CIGNA Healthcare
• Aetna
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Pharmacy Benefits Manager
MaxorPlus – PBM Carve Out
Retail Pharmacy Locations
• Over 67,000 pharmacies nationwide
Retail 90 Locations
• 56,935 pharmacies nationwide
Major Chains
• All major chains are included
Geo Access Report
• All members have access to the provided standards (radius of 5 miles urban, 10 miles suburban, 15 miles rural)
Current Pharmacy Utilization
• All pharmacies are currently included in the network
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Stop-Loss Partner
• A+ (Superior) rated by A. M. Best (second-highest rating out of fifteen)
• Ward’s 50 top-performing insurer for safety and consistency
• Strength to pay even the largest claims
• Flexibility to create the best risk solutions
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Coming Attractions
Flight to quality
Predictive
Dx & Rx
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Feasibility Analysis
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Risk Assessment - Verikai
Claims 0.81This is the risk score the carrier's health
manual will assign to your group (total
claims).
LowThis group falls within the 25th BEST
percentile of total national groups.
Spec
$50,000 0.54This is how Verikai thinks your group
will perform relative to this specific
deductible.
LowThis group falls within the 25th BEST
percentile of total national groups.
Claims+ LowThis group falls within the 25th
BEST percentile of total national
groups.
0.72
This is the Verikai risk score after
CAPTURE accounts for health,
financial, and behavioral data.
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Fully-Insured Renewal$465K (100%) Fixed
• MCA 2020 estimated fully-insured renewal is $465K, based on 62 total
enrolled employees
• Assuming annual increases of 10% per year for the next five years, MCA
expense will be $2.8m
What can you do today and over the next 5 years to
significantly reduce that $2.8m financial exposure?
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TRANSFERfixed costs - Insurance
Individual Claims above $260,000
SHAREgroup retention - captive layer
Individual Claims Paid up to $260,000
RETAIN
(claims below spec.)$35,000 Deductible (Per Member up to Max Claims)
SE
VE
RI
TY
Captive Financing
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Fully Insured Vs Captivated Health
$35,000 Deductible
Current Expected Mid-Point Max
Fully Insured $434,636 $465,061 $465,061 $465,061
Captivated Health $412,007 $430,758 $449,509
$380,000
$390,000
$400,000
$410,000
$420,000
$430,000
$440,000
$450,000
$460,000
$470,000
Fully Insured Vs Captivated Health - $35,000
Fully Insured Captivated Health
Note: maximum does not include Non-Premium Funding (reserve)
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Change Your Financing$56,447 (12%) Fixed
• Become the plan sponsor of a partially self-funded employee benefit plan
• Choose your plan design (or multiple plans)
• Determine school specific premium contribution strategy
• Option to provide additional wellness programs
• Access to tools that assist your members get the best clinical care at the
lowest possible price
• MCA pays Third Party Administrator (TPA) to: adjudicate & pay claims, issue ID
cards, access PPO networks, enrollment, claims and member inquiries
• The cost of the TPA and your Advisor is $75.41 PEPM or $56,105
• Fee will cover the cost of all risk management tools
• Self-funded plans are required to pay certain taxes, est. at $342 for 2020
• No requirement to change benefits in year one, minimizing disruption
Please note the fixed cost of $44,982 does not include any potential banking fees or non reimbursable fees
(PCORI)
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• Purchase specific & aggregate stop loss insurance ($74,514), paid monthly
• Specific stop loss protects against large claims from a single individual,
quoted at $35,000 (and $50,000)
• If an individual accumulates (through one claim or many) more than $35,000
during the policy, MCA is responsible for the first $35,000 of those claims
$-
$10,000
$20,000
$30,000
$40,000
$50,000
Claimant A Claimant B Claimant C Claimant D Claimant E Claimant F
Specific Stop Loss
Claims Per Individual Specific Stop Loss
Purchase Stop Loss Insurance
$74,514 (16%) Fixed
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Purchase Stop Loss Insurance
• Aggregate stop loss insurance protects against a
large number of smaller claims
• The aggregate stop loss insurance attachment point
is 120% of projected claims, or $225,008
Aggregate Stop Loss
Claims Aggregate Attachment
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• Each school is underwritten on its own risk
• Captive pays for claims above specific stop loss deductible
• Captive deductible is $225,000 and shared risk above the school
specific deductible
• Captive works as a “shock absorber” to smooth out volatility
• Allows both large & small schools to be equitable in risk sharing
• MCA contribution to the captive is $93,540, pooled with schools
• MCA reserve (non-premium funding) contribution is $18,708 *
• As a variable expense, favorable Captive performance in the
aggregate will result in a surplus returned back to schools
• As a variable expense, unfavorable Captive performance in the
aggregate will result in a draw down of reserves to fund losses
• If aggregate reserves exhausted, stop loss insurance applies
* 1st year non-premium funding varies based on enrollment and stop loss coverage
Participate in the Captive
$112,248 (24%) Variable
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Pay Your Members’ Claims
$225,008 (48%) Variable
• MCA pays members’ claims below the $35,000 specific stop loss deductible• Claims not prefunded, paid in 30 – 60 days, retain savings from favorable performance
• Expect MCA to incur claims of $187,507 in 1st year, $225,008 maximum• Aggregate stop loss caps MCA financial exposure
Specific Stop Loss
Employer Paid ClaimsAggregate Stop
Loss
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Projected Year 1 Results
Total Fixed cost $130,961
Captive $ 93,540*
Expected Claims $187,507
Maximum Claims $225,008
CH Expected Claims $412,007
CH Maximum Exposure $449,509*
Fully Insured renewal $465,061
Projected Savings: $53,054 – $15,552 (at max)
Key Assumptions:
• Does not include Rx rebates
• Does not include member behavior change
* $18,708 Non-Premium Funding not included in maximum exposure
TRANSFER
SHARE
RETAIN
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The Captivated Health
Value Proposition
• Control
• Actionable Data
• Scale & Stability
• Deeper Engagement
• Lower Costs
O P P O R T U N I T Y21st Century Healthcare Experience
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Action Steps & Timeline
Financial Feasibility Decision/Approval Support
Final Decision Implementation Go Live
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