Unique Group Health Plan

Special Aggregate Only Funding ProductSpecial Aggregate Only Funding Product““EZ Agg”EZ Agg”

Justin P. Horn

Regional Sales Manager

402-740-1757

[email protected]

An affordable self-funded alternative to a fully insured Plan for employer’s ranging from 25 – 250 employees

ECU’s Special Aggregate Only Product:ECU’s Special Aggregate Only Product:

““EZ Agg”EZ Agg”

Advantages of Self Funding1.   Improved Cash FlowEmployers improve cash flow when money formerly prepaid to the insurance company and held in the form of various reserves (such as unreported and pending claims) is freed for use by the employer. Self-funded plans only pay administrative fees and stop-loss premiums in advance. Claims are funded by the employer as they are paid by the administrator, typically 30-90 days after medical care is received.

2.   Cost SavingsFixed costs of a self-funded plan are normally less than those of a conventional fully-insured plan

Elimination of most State Premium Taxes:In most states there is no premium tax for the self-funded plans (usually 2-3% of monthly insurance premiums). Only the stop-loss insurance is subject to the premium tax, which is a fraction of the fully-insured premium.

Lower Administrative Overhead:Generally a TPA’s administrative costs are much lower than a traditional insurance carrier because they do no have the overhead of a large corporate structure.

Retain Reserves When the Plan Has a Good Year:An employer saves money when the plan’s claims experience is better than expected. Their experience is only based on their own population, and not pooled with other employers, who may have poor claims experience. At the same time, the employer is protected (stop-loss) in the event that the plan’s expenses are greater than expected.

3.   Increased ControlPlan Design Flexibility:Under ERISA, self-funded plans are exempt from state regulation. Therefore, an employer may establish uniform benefits for employees in different states, eliminating the need to comply with state mandates, taxes, and assessment. Furthermore, an employer has the flexibility to determine the appropriate plan design that will meet his own needs, and the plan can be amended at any time to  eliminate abuses, if they are encountered.

Service Flexibility:In a self-funded plan, the employer has increased PPO network and Pharmacy Benefit Manager (PBM) choices, in addition to various other vendors. Additionally, Health Management strategy can be tailored to meet the unique goals of each client.

“EZ Agg”

ECU’s aggregate only product is designed to help:

- TPA’s gain market share in the small group arena

- Give Brokers and Agents a small group self - funded alternative and

a value added plan to their clients and prospects

- Smaller employers (25 – 150) move to a self funded health plan with

minimal risk and give them an opportunity save money

Cost Components

TPA Administration fees and broker commissions

+

Stop Loss Premium

+

Claim Factors

= Maximum Liability

* The sum of all 3 components equal the premium equivalents.

EZ Agg Features

• Immediate advance feature – Helps with cash flow and allows for a fixed budget each month. If claims exceed the cumulative monthly attachment point then claims are immediately advanced by Pan American. Employer is responsible for funding monthly factors and premiums on day 1 of each month

• Terminal Liability Option – This can be elected and paid for anytime prior to the contract end date. 3 months of paid run-out costs 1.5 months of premiums and factors. 6 months of run-out costs 2 months of premium and factors

• Unlimited Aggregate Maximum – LTM per individuals still apply

Sample Cost Illustration

Fully Insured Current Rates

Fully Insured Renewal Rates

Admin includedEZ Agg

Admin includedEZ Agg w/ TLO

census Rates Monthly Annual census Rates Monthly Annual census Rates Monthly Annual census Rates Monthly Annual

22 $320.00 $7,040 $84,480 22 $400.00 $8,800 $105,600 22 $398.00 $8,756 $105,072 22 $447.75 $9,850 $118,206

45 $600.00 $27,000 $324,000 45 $750.00 $33,750 $405,000 45 $744.00 $33,480 $401,760 45 $837.00 $37,665 $451,980

Notes and Conditions*Please note detail of TPA fees, commissions and SL premiums on summary page.*TLO can be elected at any time in contract year prior to policy end date.*The numbers above only represent a maximum cost scenario and there is a possibility of saving money under this plan.*Signed group disclosure and confirmation of fully insured renewal is required to bind coverage as early as 30 days prior to the contract proposed effective date. (if an employer moves off anniversary date only current rates are required).

EZ Agg Advantages

Fully Insured EZ Agg Traditional Stop

Loss

Capped Funding Yes Yes No

Lasers No NoYes (some exceptions)

Access to Claims Experience

No (under 100 lives – Market specific) Yes Yes

Cost Components Premium OnlyPremium and variable claims

Premium and variable claims

AdministrationHigher cost, Less Service

Lower Cost, Great Service

Lower Cost, Great Service

Cash Calls None None YesPotential for Savings No Yes Yes

Information Needed

• Census

• Plan design – current and proposed

• Current and renewal rates (when available)

• Over 100 employees, claims data is required

• Signed Group Disclosure Statement is needed to bind coverage

• All quotes are net of commission