Self-Funded Health Plansand Why You Should Consider Them

Marketed & Administered Exclusively by: Group Benefit Services, Inc.

CORPORATE OFFICE6 North Park Drive, Suite 310

Hunt Valley, MD 21030800.638.6085

DC METRO OFFICE2400 Research Blvd., Suite 240

Rockville, MD 20850800.359.9065

WESTERN MD OFFICE43 Summit Avenue, 2nd Floor

Hagerstown, MD 21740301.671.3065

Bill Miller Equipment Sales76 EmployeesRefund Amount: $293,811

“We are paying rates according to our own risk, otherwise we might not even be able to afford to provide benefits. The plan is customizable, so we can create the ideal benefit package for our own team. An insurance carrier could not do this.”

Client testimonial

stability inself-funding

In the fully insured environment, changing insurance carriers is disruptive to both the

employees and the employer. One of the biggest advantages to self funded health plans is that

an employer gets to:

•ChooseYourBenefitDesign•Choose the Provider Network•Choose Stop-Loss Carriers

If you need to change stop-loss carriers, you can keep your benefitdesignandProvidernetwork the same, which provides continuity to the

employees.

What is self-funding?As the cost of healthcare continues to escalate more and more, employers are looking for alternative solutions. Self funding offers employers a powerful, practical alternative to traditional insurance. It allows employers to directly fund their actual claim costs while limiting their risk with the purchase of stop-loss insurance. With a traditional fully insured plan, the insurance carrier pays formost of the benefits and offermembers small out ofpocket expenses in the form of deductibles, copays and coinsurance. In a self funded plan, the employerpaysthecostofbenefitsuptoahigherdeductible,butpurchasesstop-lossinsuranceto reimburse the plan if claim expenses exceed the deductible.

Stop-lossinsuranceprotectstheplanagainstindividualcatastrophicclaims(specificstop-loss)ortheirtotalclaimexpenses(aggregatestop-loss)exceedingtheirannualbudget.EmployershireaThirdPartyAdministrator (TPA) suchasGBS toprocessandpay theclaims,provideprofessional customer service and manage the plan on behalf of the employer.

Why self-fund?Self-Funding offers you several key advantages over a traditional healthplan.WhenyouchooseGBSHealthPlansyoubenefitfrom:

Lower Fixed Costs: Most businesses realize immediate monthly savings.

Lower Claims Costs: If claims are lower than expected, you would enjoy evengreater savings.

Limited Risk: Stop-loss insurance protects you against individual or total claims exceeding your annual budget.

Flexible Benefit Options:Widevarietyofcustomizedbenefitdesignsincluding tax-favoredHSA,HRA,andFSAplans.

Wellness Plan Designs: Participant engagement and personal health coaching are critical to bending the curve of rising healthcare costs.

Reporting: We will provide useful claim reports that will show you exactly where your benefitdollarsarebeingspentandillustratehowyourplanisperformingfinancially.

four types of funding arrangements for health plansCase study on a 100 employee Company

tWo types of self-funding arrangementsEmployershavetheabilitytochoosefromavarietyofplandesignsandcustomizedbenefitstofittheneedsoftheiremployees.Employersarealsoabletochooseafundingoptionandbankingarrangementthatbestsuitstheirbudgetandcashflow.Selffundingisallaboutchoiceandflexibility.

• Level Funded health plans allow employers to pay a preset level 4-tier premiumequivalentwhichincludesfixedcostsandthemaximumclaimsfund.Because the employer is pre-funding the claims, any unused claim funds at the end of the contract period will be returned to the employer as savings.

• Traditional Fundedhealthplansgivetheemployermoreflexibilitywithcashflowsinceonlyfixedcostsareinvoicedmonthlyandclaimsarefundedastheyoccur. Since the employer is not pre-funding their claims they are retaining the savings throughout the year.

With both funding arrangements, employers get the benefit of an unbundled approach todesigning theirhealthplan. GBSpartnerswith“Best inClass” stop-losscarriers,wellnessproviders, and PPO Provider networks. GBS also helps employers reduce costs with our“employeeengagement”costcontainmentstrategies.

Fully InsuredTraditional Plan

Fully InsuredHDHP with

HSA / HRA Plans

Self-FundedLevel Funding

(5-100 Employees)

Self-FundedTraditional Funding(100+ Employees)

On average, 7% of employees have

catastrophic medical claims each year.

On average, 93% of employees use less

than $2,500 per year in medical expenses.

What is self-funding?As the cost of healthcare continues to escalate more and more, employers are looking for alternative solutions. Self funding offers employers a powerful, practical alternative to traditional insurance. It allows employers to directly fund their actual claim costs while limiting their risk with the purchase of stop-loss insurance. With a traditional fully insured plan, the insurance carrier pays formost of the benefits and offermembers small out ofpocket expenses in the form of deductibles, copays and coinsurance. In a self funded plan, the employerpaysthecostofbenefitsuptoahigherdeductible,butpurchasesstop-lossinsuranceto reimburse the plan if claim expenses exceed the deductible.

Stop-lossinsuranceprotectstheplanagainstindividualcatastrophicclaims(specificstop-loss)ortheirtotalclaimexpenses(aggregatestop-loss)exceedingtheirannualbudget.EmployershireaThirdPartyAdministrator (TPA) suchasGBS toprocessandpay theclaims,provideprofessional customer service and manage the plan on behalf of the employer.

Why self-fund?Self-Funding offers you several key advantages over a traditional healthplan.WhenyouchooseGBSHealthPlansyoubenefitfrom:

Lower Fixed Costs: Most businesses realize immediate monthly savings.

Lower Claims Costs: If claims are lower than expected, you would enjoy evengreater savings.

Limited Risk: Stop-loss insurance protects you against individual or total claims exceeding your annual budget.

Flexible Benefit Options:Widevarietyofcustomizedbenefitdesignsincluding tax-favoredHSA,HRA,andFSAplans.

Wellness Plan Designs: Participant engagement and personal health coaching are critical to bending the curve of rising healthcare costs.

Reporting: We will provide useful claim reports that will show you exactly where your benefitdollarsarebeingspentandillustratehowyourplanisperformingfinancially.

four types of funding arrangements for health plansCase study on a 100 employee Company

tWo types of self-funding arrangementsEmployershavetheabilitytochoosefromavarietyofplandesignsandcustomizedbenefitstofittheneedsoftheiremployees.Employersarealsoabletochooseafundingoptionandbankingarrangementthatbestsuitstheirbudgetandcashflow.Selffundingisallaboutchoiceandflexibility.

• Level Funded health plans allow employers to pay a preset level 4-tierpremiumequivalentwhichincludesfixedcostsandthemaximumclaimsfund.Because the employer is pre-funding the claims, any unused claim funds atthe end of the contract period will be returned to the employer as savings.

• Traditional Fundedhealthplansgivetheemployermoreflexibilitywithcashflowsinceonlyfixedcostsareinvoicedmonthlyandclaimsarefundedastheyoccur. Since the employer is not pre-funding their claims they are retainingthe savings throughout the year.

With both funding arrangements, employers get the benefit of an unbundled approach todesigning theirhealthplan. GBSpartnerswith“Best inClass” stop-losscarriers,wellnessproviders, and PPO Provider networks. GBS also helps employers reduce costs with our“employeeengagement”costcontainmentstrategies.

Fully InsuredTraditional Plan

Fully InsuredHDHP with

HSA / HRA Plans

Self-FundedLevel Funding

(5-100 Employees)

Self-FundedTraditional Funding(100+ Employees)

On average, 7% of employees have

catastrophic medical claims each year.

On average, 93% of employees use less

than $2,500 per year in medical expenses.

Self-Funded Health Plansand Why You Should Consider Them

Marketed & Administered Exclusively by: Group Benefit Services, Inc.

CORPORATE OFFICE6 North Park Drive, Suite 310

Hunt Valley, MD 21030800.638.6085

DC METRO OFFICE2400 Research Blvd., Suite 240

Rockville, MD 20850800.359.9065

WESTERN MD OFFICE43 Summit Avenue, 2nd Floor

Hagerstown, MD 21740301.671.3065

Bill Miller Equipment Sales76 EmployeesRefund Amount: $293,811

“We are paying rates according to our own risk, otherwise we might not even be able to afford to provide benefits. The plan is customizable, so we can create the ideal benefit package for our own team. An insurance carrier could not do this.”

Client testimonial

stability inself-funding

In the fully insured environment, changing insurance carriers is disruptive to both the

employees and the employer. One of the biggest advantages to self funded health plans is that

an employer gets to:

• ChooseYourBenefitDesign• Choose the Provider Network• Choose Stop-Loss Carriers

If you need to change stop-loss carriers, you can keep your benefitdesignandProvidernetwork the same, which provides continuity to the

employees.