USA Business Choice Overview
USA Business Choice Overview
Key Features of the USA Business Choice Level Funded Self-Funded Concept
- A Risk-Management approach to providing employee health coverage
- A unique answer for smaller employers trying to save money on the cost of group health insurance and brokers who would like to transition their groups to the self-funded arena
- Competitive rates
- 12/21 contract basis
- Internal pooling point maximizes potential for employer refund
- All industries eligible with the exception of law firms and MEWAs
- Group size: 10-200 lives. (Claims data is preferred for groups over 100 lives)
- Unused claim fund is refunded to the employer at the end of the plan year
- Stop Loss insurance offers full protection from larger claims. Employer will never have to pay more than the maximum monthly cost
- The predictability of a level monthly cost. (There are no extra charges if there are high claims)
- ERISA plan that is exempt from many of the new federal Affordable Care Act regulations
This is an excellent fit for:
Employers with good demographics and good health experience who feel they are paying too much premium for too little in benefits. Do your employer groups receive money back from their insurance companies for being healthy? If the answer is NO, then the USA BUSINESS CHOICE Level Funded Plan could be the right alternative for them.Jeffrey Diekema
How is This Plan Different from a Fully-Insured Plan?
Under a fully-insured plan, the monthly premium costs are locked in. Even if a group is healthy and has no claims, the savings are retained by the insurance company to pay the claims of less healthy groups.
With USA BUSINESS CHOICE Level Funding and the smart use of Stop Loss Insurance, the employer pays a monthly cost that is the maximum cost. No matter how much claims are in a month, the employer will never pay more than this monthly cost. After all claims are paid for the year, the unused money in the claim fund can be returned to the employer or retained by the Plan to offset future cost variances.
- Defined and Contained Risk – The employer’s maximum exposure and annual costs are determined up front through the purchase of Stop Loss insurance. Standard provisions include coverage for claims incurred during but paid after the end of the plan year.
- Stabilized Cash Flow – Maximum annual claim liability is equally spread over 12 months. If the employer’s claim fund does not contain sufficient money to cover claims, the Stop Loss insurance coverage will advance the necessary funds (also referred to as “Accommodation”). No requests for additional money from the employer are made.
- Claim Fund – After the claim run-out period, remaining funds are released or rolled over to the next year as credit. This is the essence of alternative funding—money not spent on benefits remains with the employer’s benefit plan, not the insurance company.
What are the Advantages of Level Funded Self-Funding with USA Business Choice?
Plan Design Flexibility and Stability
Freedom to choose a plan of benefits that meets the needs of the employer, provides for simplified underwriting, plan design choice, and implements cost-saving features of the employer’s choice.
Maximum annual claims costs are predetermined and the employer pays 1/12 of this cost each month for the 12 months of the plan year. After this amount, there are no other charges for the claim fund. Once all claims have been paid for the plan year, any unused dollars in the claim fund are returned to the employer.
- Monthly Accommodation – If at any time the money necessary to pay larger claims is not in the claim fund (this is common during the early months of a plan year), the stop loss insurer will advance this money to the claim fund to pay these claims. Subsequent monthly payments into the claim fund will be used to repay this advance.
- Reporting – Each month, the employer will receive an accounting report on all claims paid during the month and the plan year-to-date. Each quarter, they will receive a detailed report about claims paid (subject to federal and state privacy regulations.) This reporting provides the information necessary to fully track the claim fund and to understand where the claim fund dollars are spent (such as doctor’s office visits, prescription drugs, outpatient services and hospitalizations.) With this information, the plan can be designed to contain costs and target problem areas.
- Plan Year & Terminal Liability – The plan year runs for 12 months from the effective date. Claims incurred during the plan year will be paid through a 9-month run-out period and any balance in the claims fund is refunded to the employer. Terminal Liability coverage is built into the plan by providing the 9-month run-out period.
RFP SUBMISSION REQUIREMENTS
- Group name, industry and location
- Current rates
- Renewal rates
- Current plan of benefits
- Claims data, if available. If no claims data is available, we will provide a preliminary proposal that will require individual apps to bind coverage
- Broker online portal is available to generate preliminary proposals
USA Business Choice offers this program with Third Party Administration Services offered by Regional Care, Inc. (RCI). Stop Loss coverage is provided through various A-rated, admitted carriers. Please contact USA BUSINESS CHOICE for details.