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Self-Funding with AmeriShare Presented by: American Trust Administrators, Inc.
Self-Funding with AmeriShare
Presented by:
American Trust Administrators, Inc.
American Trust Administrators
A full service Facility
Established in 1972 – over 40 years of experience
Specializing in self-funded medical plans for
groups with 10 or more employees
Pioneered self-funding for small to medium
employers
Headquarters in Lee’s Summit, MO (suburb of
Kansas City)
ATA offers cost savings through:
National and regional PPOs
ATA Rx Pharmacy Benefit Management program ScriptCare
HSA-qualified and other high deductible plans
Dual & Triple option plans
Direct Contracting
Reference-based pricing strategies
American Trust Administrators
ATA Products
AmeriShare - self-funded medical plan
For groups of 10 to 99 (varies by state)
underwritten by long form app with some telephone
interviews
ATA gives the smaller employer an opportunity
previously available only to large employers
ATA Products
Life, AD&D, & Dependent Life
Fully insured, packaged with medical
Dental and/or Vision
Available as a self-funded benefit with AmeriShare
Self-Funding: What It Isn’t
Not for groups with above average claims
experience
Not a short-term solution to reducing and
controlling benefit costs
A long-term strategy, not a quick fix
Employer’s business should be stable; not likely to
reduce the number of employees
Why Do Employers Like It?
Benefit directly from favorable claims experience
Maximum expenditures for the next 12 months are
known up front
Keep interest on claims reserves
Pay reduced carrier profit & risk charges
Pay less state premium taxes
Has the potential for improved cash flow
Greater control over plan design
Design a benefit plan that will attract and retain
employees
Costly state mandated benefits can be avoided (self-
funded plans are governed by ERISA)
Receive information for decision making
Detailed reports show where benefit dollars are going
Enables the development and management of cost-
effective benefit plans
Why Do Employers Like It?
Self Funding…
Does not have “Community Rate”
Does not have to “Guarantee Issue” coverage
Does not have 3:1 rate compression rules
Does not have MLR rules
Is not subject to some taxes/fees
Self Funding and the ACA
Benefits Design
Flexible benefit options may be tailored to group needs and managed for cost-effectiveness
Choice of deductibles, coinsurance amounts, Rx, OV Copays and many other benefits
PPO, Indemnity, & HSA/HRA compatible plans available
Minimum Essential Benefit plans
Self-Funding: A Basic Definition
Employer establishes plan to provide health care benefits to its employees
Employer limits exposure by purchasing excess loss coverage Helps employer fund the unpredictable, catastrophic
losses & excessive utilization
Self-funds predictable claims
Allows smaller employers to self-fund successfully
For many groups, Self-Funding is a viable alternative to fully insured plans and HMOs
Excess Loss Coverage
Protection for the Employer against unexpected or unpredictable claims
Two types (typically packaged together):
Specific – helps protect the employer from large claims on any one member/family
Aggregate – helps protects the employer from heavy claim utilization on the group as a whole
Excess loss coverage for AmeriShare is provided by Companion Life Insurance Company Rated A+ (Excellent by A.M. Best)
Specific Excess Loss
Helps limit the employer’s exposure on any one
individual
Reimburses the employer for claims paid in
excess of the Specific Deductible that are
incurred and paid within the time frames elected
when coverage was purchased
With ATA, prescription, dental, and vision benefits
can be covered in addition to medical
Reimbursed immediately as claims are paid
Specific Deductible Options
Amount selected by the employer
Function of company’s size, risk tolerance, financial
resources, plan of benefits and claim history
AmeriShare $7,500 to $50,000 (varies by state)
May be per person or 2x cap per family
Supplemental Individual Retention
Deductibles (SIR) or “Lasers”
An SIR is higher specific deductible for an individual with potential large claims (Remember that excess loss coverage is intended to
cover unknown or unpredictable losses)
An SIR is an underwriting/Risk Management tool used to: Avoid loading excess loss premiums
Make self-funding available to more groups if they are willing to assume more risk
We will review and consider removing lasers at renewal
Aggregate Excess Loss
Helps limit the employer’s exposure for the group’s claims as a whole Reimburses claims paid above the “Aggregate
Deductible” that are incurred and paid within the time frames elected when coverage was purchased
Aggregate deductible is determined by our underwriting facility Expected claims determined actuarially based on
the demographics and history of the group
Aggregate coverage can also include Rx, dental, and vision claims.
Provides monthly protection against
unpredictable claim fluctuation
Advances funds to cover heavy claims utilization
Paid if accumulated claims exceed “monthly
aggregate accommodation point”
Must be repaid:
1. When accommodation point again exceeds
accumulated claims, or
2. On termination, if accommodation point is less than
the aggregate deductible
Monthly Aggregate Accommodation
Many specific and aggregate options are available based on employer needs
Contracts vary by when a claim is incurred and when it must be paid in order to be covered
Differs from fully insured plans, which are essentially “Incurred” contracts (a charge for claims incurred but not reported is collected up front as a part of each monthly premium)
Specific and aggregate can be sold with different coverage periods
Specific & Aggregate Contracts
Contract Types – Example #1
12/12: Claims Incurred AND Paid within the plan
year
1/1 12/31
Incurred
Paid
Contract Types – Example #2
12/15: Claims Incurred within plan year AND
Paid within the plan year PLUS three months
following – this is called “run-out” coverage
1/1 12/31 3/31
Incurred Dates
Paid Dates
Contract Types – Example #3
15/12: Claims Incurred within the plan year Plus
the 3 preceding months AND Paid within the plan
year – this is called “run-in” coverage
10/1 1/1 12/31
Incurred Dates
Paid Dates
Specific & Aggregate Options
AmeriShare
Specific Aggregate
FY RN FY RN
12/15 12/15 12/15 12/15
12/18 12/18 12/18 12/18
12/12 24/12 15/12 24/12
12/12
w/TLO
24/12
Funding Options
Minimum – group makes periodic deposits to
claims account as needed to fund claims
We advise depositing an amount equal to two months’
estimated aggregate deductible to establish reserve
and avoid claim delays
Maximum – group funds up to the monthly
accommodation point amount shown on their bill
Funding option can be changed on request
Excess money in the Claims Fund can be:
Rolled over to cover the next year’s claims or used to
reduce future Claims Fund contributions
Change from maximum funding to minimum funding
Used to add benefits to the plan
Used to fund run-out liability (discussed later)
Used to fund any other employee welfare benefit plan
established pursuant to ERISA, such as:
Dental, vision, LTC, life, disability income, unemployment
plans, vacation plans, pre-paid legal plans
Returned to the Plan Trustee at termination
Plan Surplus
Understanding the Proposal
Fixed costs
Amount paid each month regardless of claims utilization
Includes:
Excess loss coverage premiums
Agent compensation
TPA service fees
Other fees: PPO access, preauthorization, utilization
management, disease management
Maximum Aggregate Deductible Claims fund
Includes 5% claims fee for AmeriShare groups and 1% claims fee
for ISL groups
Summary
Advantages for Your Clients:
Benefit from favorable claims experience
Maximum claims and insurance expenditures
for the next 12 months is known up front
Keep interest on claims reserves
Pay reduced carrier profit & risk charges
Pay less state premium taxes
Has the potential for improved cash flow
Protection from adverse claims experience
Advantages for Your Clients:
Greater control over plan design
Custom design a benefit plan that will attract and
retain employees
Costly state mandated benefits can be avoided
Receive information for decision making
Detailed reports show where benefit dollars are
going
Enables the development and management of cost-
effective benefit plans
Summary
