Upload
others
View
4
Download
0
Embed Size (px)
Citation preview
Agenda
• Introduction• Health Plan Self-Funding• MEWA Explained• MEWA Benefits• Five Phases of MEWA
Development• MEWA Build Options and ToolBox• Next Steps• Implementation Timeline• Questions
INTE
GR
ITY
BEN
EFIT
SO
LUTI
ON
SMEWA FEASIB IL ITY
MEWA BUILDING AND MANAGEMENT SUPPORT
SERVICES
Integrity Benefit Solutions, LLC works solely to assist associations achieve a key value proposition – to help their members provide high quality services through education, representation, and group services.
Our proven process helps the association reduce both the build cost and development time, as well as deliver ongoing plan services to support the governing Board.
We bring expertise working with all health plan types and use our experience to identify trends and make recommendations to continually improve the plan for its members.
WHY COMPANIES SELF-FUND
Fully-Insured vs Self-Funded Health Plans
4
In the last decade, there
has been nearly a
complete overhaul of
the US healthcare
finance system, while
premiums have
doubled.
• The Affordable Care Act
(ACA)
• The Medicare Shared Savings Program (MSSP)
• The Next Generation ACO program (NGACO)
• The Hospital Readmission Reduction Program (HRRP)
Legislative solutions are not working
HEALTH PLAN FUNDING: SELF-FUNDED/FULLY-INSURED
* © Statista 2021 5
67%
US Workers on a
Self-Funded Health
Plan*
6% INCRESE
Shift to Self-
Funding
20-25%
Average FI Profit
Margin
10-12%
SF Fees Avoided:
EX: Premium Tax,
State Mandated
Benefits
$1 SF/$1.25 FI
Healthcare Spending
Success
FINANCIAL DIFFERENCES
SELF-FUNDED MODELS
6
• Fixed Monthly Cost for reinsurance and
administration
• Plan pays Claims Liability up to specific and
aggregate limit
• Specific Stop Loss Reinsurance for
individual spend above specific limits, and
• Aggregate Stop Loss Reinsurance for
collective claims above threshold
Partial Self-Funding
• “Premium-like” monthly cost
• Employer funds claims up to monthly limit to
“Level” spend
• Reinsurance covers Aggregate limit, but no
Specific
• Lower volatility is advantageous particularly
for smaller companies
• Higher percentage cost for Reinsurance
• Less opportunity for surplus
Level-Funded
• Multiple Employer Welfare Arrangement
• Member-owned Plan
• Combines “Premium-like” dollars from all
MEWA Members to cover all plan costs
• Permits higher limits of Reinsurance to lower
costs
• MEWA secures administrative and vendor
services at lower cost
• MEWA manages the Plan on behalf of
Members
• Surplus is retained by the MEWA
MEWA
Multiple Employer Welfare AssociationMEWA Exp la ined
Multiple EmployersEmployers with common interest
can band together to provide
employee health insurance as if
they were one employer
Governing BodyThe MEWA is owned by the
participating Employers and
governed by an owner Board of
Trustees
AutonomyEach Employer selects
benefits with an overall
construct established by the
MEWA
RegulationThe MEWA is regulated by
ERISA and applicable State
laws
MEWA BenefitsWRITE SOMETHING HERE
The combined group secures
bargaining power and economies
of scale in contract negotiation
and service acquisition
Buying Power
A self-funded structure allows
flexibility for comprehensive
coverage that best serves the
needs of employees
Comprehensive Coverage
Single point of management
to monitor claim trends,
vendor performance and
recommend improvements
Plan Management
Assists employers in providing
healthcare coverage for all their
employees in a more cost-
effective manner
Cost-Effective Delivery
Cost comparison
9
Michigan Average 2020 Employer Premiums
Employer Comparative Criteria
PPO Plans Healthcare Industry Non-Union
Large Employer (200+ EEs) Few Higher-Wage Employees Self-Insured
Midwest Region Many Lower-Wage Employees Not-for-Profit
Annual Deductible: $1,767 Out-of-Pocket $4,039
Average Monthly Employer Premiums
MEWA “Premiums” at 20% Reduction
Example Net Premium
Single: $636 20% $509
Family: $1,819 20% $1,455
Annual Premium: $1,810,320$361,680 (savings)
$1,448,640
FIVE PHASES OF MEWA IMPLEMENTATION
A process to validate structure and strength
FeasibilityConfirm Member
participation
Member Buy-InBoard confirms Plans and
Program vendors
Plan DesignMembers sign MEWA
contract
ConfirmationBilling, eligibility, and Open
Enrollment set-up
Implementation
While there are different methods of forming a MEWA, one type of MEWA, known as a VEBA, or voluntary employees' beneficiary association is a tax-advantaged welfare benefits funding vehicle defined under the Internal Revenue Code (IRC).
The structure and operations of a VEBA tend to fit well with the organization and needs of many LeadingAge state associations.
By definition, VEBAs are substantially devoted to providing for the payment of life, sickness, accident, or other benefits to the VEBA's members and their dependents and beneficiaries.
When properly organized under IRC Section 501(c)(9), a VEBA will be exempt from federal income taxation.1
Feasibility
1. 26 U.S.C. § 419(e)(3)(A); 26 U.S.C. § 501(c)(9). Section 501 of the IRC deals with organizations that are exempt from federal income taxation. VEBAs are described in IRC § 501(c)(9) as: "providing for the payment of life, sick, accident, or other benefits to the members of such association or their dependents or designated beneficiaries, if no part of the net earning of such association inures (other than through such payments) to the benefit of any private shareholders or individual." The reader is cautioned that this article is not intended to provide any form of tax advice, or method for avoiding tax penalties, insurance regulation, or any other legal requirement. It is recommended that the reader seek the advice of an independent tax advisor or other qualified professional based on a program's particular circumstances.
To qualify as a VEBA, the entity must be organized pursuant to the Regulations. Requirements of a Self-Funded MEWA/VEBA vary by State.
As such the feasibility study encompasses both a financial and legal analysis, including:
A. Legal review of the Association framework
B. Legal confirmation of State favorability toward association health plans, MEWAs, and VEBAs
C. Board formation
D. Set-up legal entity, develop Articles of Incorporation, Bylaws
E. Develop Contracts and Rules (Membership & Adoption Agreement and Administrative Guide)
F. Determine Target Launch Date
Feasibility
Meetings with Association Members interested in learning about the Program parameters: Conferences, Regional, and individual employer meetings
Secure Letters of Intent for Member Participation
Gather marketing information from Members (Member information, census, employee health information)
Determine Member (Employer) Participation
Member Buy-In
The Board confirms plan designs, eligibility, and other benefit parameters
Solicit proposals for claims administrator, reinsurance, and other benefit vendors
Select and finalize vendor contracts
Work with actuary to determine preliminary pricing
Develop marketing plan
Submit for temporary Certificate of Authority
Finalize Plan Designs and Pricing
Plan Design
Launch series of educational webinars regarding the plan structure, administration, preliminary pricing
Membership & Adoption Agreement. The Contract describing the rights and obligations as Member owners of the plan. It is contractually connected to the Administration and Compliance Guide, the Member Application, the Bylaws and Articles of Incorporation
Administration and Compliance Guide. Describes the “how-to” – or legal and regulatory employer obligations and administrative guidance.
Member Application. Reports employer Plan Elections, contributions, waiting periods, and billing information
Member Contracting
Member Confirmation
Coordinate Open Enrollment between Members, claims administrator and vendors for:
On-site and/or virtual Open Enrollment meetings
Enrollment processes
Consolidated Billing
Eligibility, including EDI Data Transfer needs
COBRA Administration Set-up
Submit final enrollment to reinsurance and actuary
Work with Members to answer questions, review processes, provide enrollment and payroll deduction reporting
Distribute Welcome Packets with ID Cards
Final Steps to Launch Date
Implementation
MEWA BUILD OPTIONS – OPTION 1
PRO’s
Flexibility to incorporate unique coverage platforms
Plans will be unique to your Association
Can integrate multiple more Michigan-specific vendor programs
From Scratch
This Photo by Unknown Author is licensed under CC BY
CON’s
Larger investment needed for custom development
Longer time to launch
May have more State scrutiny in evaluating benefits
Will require more Board time commitment throughout build
MEWA BUILD OPTIONS – OPTION 2
PROs
Reduces build time
Lowers build cost
Improves favorability for State approval
Utilizes a proven plan for greater Member confidence
Accesses greater buying power with other MEWAs
Toolbox
CONs
Few variations can be incorporated without adding time and cost in the first year
This Photo by Unknown Author is licensed under CC BY-NC
This Photo by Unknown Author is licensed under CC BY
Articles of IncorporationTrust DocumentsBy-LawsVendor Agreements
Structural Documents
Member Documents
Implementation Documents
Member ApplicationOpen Enrollment Guides and Educational MaterialID Cards and Welcome KitsInvoicing Structure
Membership & Adoption AgreementAdministration and Compliance GuidePlan Documents and Summary Plan Description
Next StepsWhere From Here?
Decision-makers from 6-10 employers commit to participating in a Task Force to build the Plan. Typically, this group becomes the inaugural Board
Task Force FormationLeadingAge Michigan Members are
surveyed to determine interest level for participation
Survey
4-5 Members in various regions of Michigan volunteer to host meetings to educate, answer questions, and garner interest
Regional MeetingsFormal letter from Members indicating
commitment
Letter of Intent
Implementation TimelineAssuming Board Approval by October 15, 2021
2021November
Regional Meetings
Onsite Meetings for Decision-
makers
2021January
Letter of Intent
Gather Census, Gatekeeper App/Claims,
Plan Elections
2022February
Rating Prep
Stop Loss Proposals,
Preliminary Rates
2022March
Member Commitment
MAA, Member App,
Contributions
2022April
Training Webinars
Series of educational webinars for Admin/HR
9-28-2021Implementation Timeline 021
October December
Implementation Timeline
2022May
Open Enrollment
Face-to-Face On-site
Employee Meetings
2022June
OE Ends
Audit Enrollment
2022July
Welcome Packets
Employee Welcome
Packets, ID Cards are
distributed
2022August
Wrap-Up Webinar
Review Processes,
answer questions
2022September
Launch Date
Plan Effective
9-28-2021Implementation Timeline 022
23
Questions
This Photo by Unknown Author is licensed under CC BY
OUR BRILLIANT TEAM
Sharon is the founder and CEO of
Integrity Benefit Solutions. Sharon is
the architect of the MEWA Platform.
She has 30+ years of experience in all
aspects of insurance, including
underwriting, service, sales and
management
Sharon Earlenbaugh
MEWA building and Plan Management
Support Services
Integrity Benefit Solutions, LLCTyler is Sales Executive at Integrity and
leads the sales and marketing team to
introduce members to the MEWA platform
and bring members through the
implementation process
Tyler Wells
KEEP IN TOUCH WITH US