Page 16 - The EDGE Spring 2020

Employee Health Benefits
Employee Health Benefits

As Arizona school districts explore their employee health benefit options, it is important to become familiar with the
As Arizona school districts explore their employee health benefit options, it is important to become familiar with the
various types of coverage to ensure the best decisions are made. Some key questions that may come to mind to give you
various types of coverage to ensure the best decisions are made. Some key questions that may come to mind to give you
a better understanding are the following:
a better understanding are the following:
1. What are the different types of coverage?
1. What are the different types of coverage?
2. What are the main differences between each of the three types of coverage?
2. What are the main differences between each of the three types of coverage?
Type of Coverage Fully Insured Pooled Self-Funded
Type of Coverage
Self-Funded
Fixed
Fixed
Cost/expense:* Fully Insured Pooled Varies each month
Fixed
Cost/expense:* Fixed Select plan options to choose Varies each month
Benefit choices: Varies Select plan options to choose Varies
Benefit choices: Varies from Varies
from
Services:** Limited—bundled Included—no cost—customized Extra cost
Services:** Community rated or Included—no cost—customized Extra cost
Limited—bundled
Combination individual and
Renewal adjustments
Renewal adjustments Community rated or Combination individual and Own experience
pooled experience
based on:***
own experience
Own experience
based on:*** own experience pooled experience
Volatility of adjustment/
Volatility of adjustment/ Varies Stable/less volatility Varies
historical increases:****
Stable/less volatility
Varies
Varies
historical increases:****
Profits/excess
Profits/excess Stockholders Members Local Reserves
contributions retained by:
Local Reserves
contributions retained by: Stockholders Members Covered by local
Run-out exposure Covered by carrier Covered by pool Covered by local
Run-out exposure Covered by carrier Covered by pool reserves
reserves
*Cost: fixed = monthly premium/contribution amount set at beginning of plan year, self-funded = claims are funded as they occur and vary each month; however,
reserves for potential claims should be funded up to an additional 25 percent.
*Cost: fixed = monthly premium/contribution amount set at beginning of plan year, self-funded = claims are funded as they occur and vary each month; however,
reserves for potential claims should be funded up to an additional 25 percent.
**Services include: wellness, biometric screening, Employee Assistance Programs (EAP), Health Savings Accounts (HSA), etc.
**Services include: wellness, biometric screening, Employee Assistance Programs (EAP), Health Savings Accounts (HSA), etc.
***Renewal adjustments are based on the claims experience of either the individual school district’s claims (i.e., “Own”), the combination of the individual and
entire pool’s experience (i.e., “Pooled”) or dependent on size (typically smaller) would be community rated.
***Renewal adjustments are based on the claims experience of either the individual school district’s claims (i.e., “Own”), the combination of the individual and
entire pool’s experience (i.e., “Pooled”) or dependent on size (typically smaller) would be community rated.
****Volatility: rate adjustments from a pool tend to be less volatile as they are based on a large number of members. Compared to rate adjustments based solely
on individual experience that can vary significantly.
****Volatility: rate adjustments from a pool tend to be less volatile as they are based on a large number of members. Compared to rate adjustments based solely
on individual experience that can vary significantly.
www.meritain.com | © 2020–2021 Meritain Health®
www.meritain.com | © 2020–2021 Meritain Health®
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16 THE EDGE SPRING 2020