Funding and Finance of Health Benefits Course Outline

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Methods for funding and financing employee health benefits are complex and have changed over time. Rising health care costs together with new options for self-insuring or self-funding benefits provide an environment with many choices to consider in how to pay for health care benefits.  
 
Employee benefits professions need to be able to evaluate and discuss proposals for funding from insurance companies and third-party administrators. There are benefits and drawbacks to each solution.  In addition, each employer or benefit fund has its own unique needs and risks to balance.  A complete understanding of the marketplace and the pros and cons of the various solutions is needed to select the right solution and optimize the efficiency of the plans.  
 
This session explores the various options for funding health benefits with an emphasis on selecting the methods that will work best for your employee group and the level of risk you or the plan sponsor is willing to accept in exchange for potentially lower costs.  You will leave the session equipped with real world knowledge to help you manage your health care dollars efficiently. 

 

Day 1

  1. Introductions
  2. Pillars of financing
    1. Fully insured vs. self-funded
      1. Fully insured rating alternatives
      2. Self-funded administration alternatives
      3. Funded vs. unfunded plans
      4. Factors to consider for self-funding
        1. Claims predictability
        2. Organization's/fund's finances
        3. Administration
        4. Taxes
        5. Plan design
        6. Employee population characteristics, related health care costs and cost-containment initiatives
        7. Employee communications and relations
    2. Risk Management
      1. Risk management spectrum
      2. Frequency and severity
  3. Financing Mechanisms
    1. Concepts in this section include:
      1. Creditability of a group
      2. Surplus, deficit and retention 
      3. Reserves
      4. Pooling
      5. Advantages, disadvantages and prevalence statistics of financing options
      6. Future trends outlook
    2. Fully Insured
      1. Experience rated
      2. Premium delay
      3. Minimum premium
    3. Self-Funded
      1. The concept of stop-loss insurance
      2. Administrative-services-only vs. third-party administration
      3. ERISA preemption
  4. Funding Vehicles
    1. General assets
    2. Trust
    3. VEBA
    4. Captive insurance company
  5. Employee Contributions
    1. Methodologies
    2. Credit and surcharge strategies
  6. External Landscape
    1. Private exchanges
    2. Group captive arrangements
    3. Affordable Care Act (ACA) taxes and fees
      1. PCORI fee
      2. Transitional reinsurance fee
    4. Actuarial Value (AV) calculator explanation and demonstration
    5. No Surprises Act
    6. CARES Act
    7. American Rescue Plan Act (ARPA)

Day 2

  1. Self-Funding (The Deep Dive)
    1. Health care insurance food chain
      1. Payers
      2. Components of a claim
    2. Stop-loss insurance
      1. Specific, aggregate, aggregating specific
      2. Types of stop-loss contracts
      3. Pricing of stop-loss coverage
      4. Purchase and renewal decision points
      5. Expected incidence and severity rates
    3. Assessing and developing incurred but not paid (IBNP) reserves
    4. Setting and underwriting premium equivalent (PE) and COBRA rates
      1. Claims data
      2. Census data
      3. Fees
      4. Vendor administration
      5. Prescription drug rebates
      6. Creditability of the group
      7. Plan design(s)
      8. Health care cost trend rate assumptions
  2. Scenarios in Transitioning From One Financing Type to Another
    1. When should an organization consider transitioning?
    2. Who provides the transition alternatives and analysis?
    3. What steps need to be taken?
  3. Case Study
    In the case study, class participants are broken up into groups based on whether they represent a multiemployer or a single employer plan sponsor. Each group reads about a fictitious scenario, draws conclusions, collaborates on recommendations, and then reports their findings and recommendations back to the entire classroom.

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