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Ternian Insurance Group offers a self-funded health insurance plan that requires only 25% participation for stop loss coverage, making it affordable for employers. Traditional stop loss requires 75-80% participation that many employers cannot meet. Ternian's plan gives credit for employees with other coverage and only requires offering coverage to 70% of employees in 2015. This can significantly reduce costs for employers struggling to provide affordable healthcare to lower-wage workers while remaining ACA compliant.
Ternian Insurance Group offers a self-funded health insurance plan that requires only 25% participation for stop loss coverage, making it affordable for employers. Traditional stop loss requires 75-80% participation that many employers cannot meet. Ternian's plan gives credit for employees with other coverage and only requires offering coverage to 70% of employees in 2015. This can significantly reduce costs for employers struggling to provide affordable healthcare to lower-wage workers while remaining ACA compliant.
Ternian Insurance Group offers a self-funded health insurance plan that requires only 25% participation for stop loss coverage, making it affordable for employers. Traditional stop loss requires 75-80% participation that many employers cannot meet. Ternian's plan gives credit for employees with other coverage and only requires offering coverage to 70% of employees in 2015. This can significantly reduce costs for employers struggling to provide affordable healthcare to lower-wage workers while remaining ACA compliant.
Cook, Strategic Business Development, Ternian Insurance Group LLC
Ternian Insurance Group, LLC, 7310 N 16th St, Ste 100, Phoenix, Arizona 85020, 602.216.0006 www.ternian.com Stop loss requirements and the pursuit of self- funding. A fact-based analysis. ternian An unprecedented 25% participation requirement for stop loss within Ternians plans will allow employers to offer this coverage to all classes of eligible employees. Self-funded benets are emerging as an ideal approach for employers looking to offer an affordable minimum essential value plan to eligible workers. In fact, a recent survey of health insurance executives reveals that 82 percent have experienced a growing level of interest among employers for self-funded group insurance. 1 Self-funded benets offer a variety of advantages for mid-size and large employers, including: Unlike fully-insured plans, these plans are not tied to community rating and are not subject to state insurance laws or many ACA requirements such as the health insurance industry fee. As a result of these requirements, many health insurance carriers have predicted that premiums for fully-insured plans may increase in the double digits for 2015. Self-funded benefts are not subject to reviews by HHS for premium increases. These plans can be customized to meet the needs of employees and an employers budget. The challenge for employers with lower-wage or hourly workers Non-discrimination testing does require that the same ACA-compliant plan be offered to all levels and classes of eligible employees, regardless of whether the benets are self-funded or fully insured. This is a challenge for many employers who have traditionally offered major medical coverage as a carve-out available only to managers and home-ofce employees. Thats because low participation among hourly workers (such as those employed in the retail, service and hospitality industries) will mean that employers cannot meet the strict participation requirements of stop loss carriers. Stop loss is a critical element of self-funded coverage, especially in light of the ACAs elimination of certain benet restrictions such as lifetime maximums, which can drive a large volume of high-cost, catastrophic claims. However, employers with low participation rates (below 75 percent) are not generally considered candidates for stop loss coverage. Some stop loss insurers have slightly higher or slightly lower participation thresholds, but on average, anything below 80 percent will typically not receive a bindable stop loss quote. The self-funding dilemma: Traditional stop loss participation requirements will prevent many employers from pursuing self-funding as an affordable solution for ACA-compliance. ternian Employers with low participation rates (below 75 percent) are not generally considered candidates for stop loss coverage ternian Ternians self- funded plan option requires as little as 25% participation for stop loss coverage to be bindable, making this is an extremely affordable solution for employers. This level of participation will be impossible for many employers to meet, especially those in industries mentioned above. Thats because younger, lower wage workers have a signicant price sensitivity to benets, even when they are offered with a sizable employer contribution. A recent research study demonstrated that among full-time eligible employees with base pay between $15,000 and $20,000, only 37% elected health coverage. 2 In the small group who did elect health benets, the employee contribution to premiums averaged just 5.7% of their total pay. Age may also have an impact on participation rates. According to a recent Wall Street Journal article, in 2014, young workers in the U.S. signed up for employer-sponsored health plans at a lower rate than last year, in spite of the individual mandate. THE SOLUTION: Ternians self-funding approach allows for as little as 25% participation Ternian has partnered with a forward-thinking stop loss carrier that is willing to adapt its participation requirements to meet the changing needs of employers in light of the ACA. Our self-funded plan option requires as little as 25% participation for stop loss coverage to be bindable, making this is an extremely affordable solution for employers. In addition, our solution gives full credit for coverage elsewhere waivers where an employee has health insurance through a spouse or government exchangemeaning that these individuals wont count toward participation rates. Census bureau studies suggest that this number will be approximately 33% 5 of the eligible employees. In addition, since only 70% of employees need to be offered coverage in 2015 according to new rules issued for the employer mandate, the total number of enrollees can be reduced even further. 6 The following chart illustrates the cost savings that can be achieved by employers with lower participation through Ternians solution: Total employees 1,500 Less part time employees and measurement period employees (50%) -750 Less waivers for coverage elsewhere (33% of new eligible employees)** -145 Full time eligible employees 605 Employees that must be offered coverage (70% of full time eligible employees) * 424 Carrier required enrollment to meet a 25% participation requirement 106 Less 90 employees currently enrolled in a major medical carve out plan -90 Net new enrollees required 16 Estimated increase in monthly employer cost at a $250 contribution level $3,969 If desired, Ternians self-funded plan can be aggressively priced with the lowest level of ACA-compliant benets. The employer can then offer class dened supplemental benets that dont coordinate with the major medical for higher-paid employees while still avoiding discrimination issues. Unless employers are willing to contribute to major medical plan premiums to the extent that the employees costs reaches nearly zero, a traditional self-funded approach will not be an option for many organizations. However, Ternians plans will put self-funded benets within reach for many employers, regardless of the age or income levels of their eligible employees. To learn more about this solution, contact us today at 602-216-0006. 1. Munich Health Survey. February, 2014. http://www.businesswire.com/news/home/20130415005132/en/ Health-Insurers-Anticipate-Increase-Self-Funding-U.S.-Employers#.U2JZwKV220u 2. ADP. How Income Impacts Employee Health Benefts Participation White Paper. https://www.adp.com/media/ press-releases/2013-press-releases/adp-research-institute-study-employee-income-is-a-determining- factor-in-benets-participation.aspx 3. Francis, Theo. Wall Street Journal. Young Workers Fail to Flock to Employer Health Plans: Take-Up Rates Among Those Under 30 Show Unexpected Decline. April 3, 2014. http://online.wsj.com/news/articles/ SB10001424052702303847804579479181342342704 4. Albert, LaRea. Stay the course. Benefts Pro. http://m.beneftspro.com/2013/08/05/stay-the-course 5. Hubert Janicki , US Census Bureau. Employer-based Health Insurance 2010. Issued February 2013. https://www.census.gov/prod/2013pubs/p70-134.pdf 6. www.irs.gov/uac/Newsroom/Questions-and-Answers-on-Employer-Shared-Responsibility-Provisions- Under-the-Affordable-Care-Act ternian