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- 1. Cost Saving Employee Benefit Strategies Today and Tomorrow GAP 3.0 and GAP 4.0
- 2. Premium increases? Continue shifting costs to employees? Aging workforce and early retirees? ACA Compliance? Everyone’s goal: multiple year strategy that reduces costs AND maintain (or improve) your current benefit levels? Cost of Health Insurance-Today’s Trends
- 3. Options for Employer Groups Do nothing, hope for the best, then dump your employees to the Exchanges in 2014. Reduce employees “real” benefits by increasing employee deductibles and premium contributions. Or... Use one of 2 new, safe strategies to guarantee savings without risk…And still maintain (or improve) benefits…
- 4. GAP Insurance High Deductible Plan The “GAP” Insurance Strategy GAP Insurance is fully compliant under HIPAA and the Public Health Service Act (PHS Act)
- 5. MAJOR MEDICAL + GAP Insurance Equivalent (or better) coverage to current plans Same employee out-of-pocket expenses (or better) Lower annual premium costs Stabilized annual insurance increases Typical annual savings up to $2k per employee! Combined plans cost less with same (or better) coverage!
- 6. Similar “GAP” Insurance Strategies Medicare + “Medigap” Supplemental Plans We Love our MediGap Plan
- 7. How “GAP” Works Employees receive two insurance cards; one for Major Medical Plan and one for the GAP Plan. If the service is covered by Major Medical but is subject to the new high deductible, employee’s bill will be paid by the GAP plan. No Claims forms necessary.
- 8. The “GAP 3.0 ” Strategy “Duplicate coverage” Increase major medical deductible to lower premiums. BCBSM CB 15/0 or 15/20 (5k ded) BCBS SB 4000 HRA MCLAREN POS 3K DED/ 3K COINSURANCE “Backfill” the new large deductible sufficient enough to duplicate existing benefit plan. New Benefit platform saves premium dollars while maintaining existing employee deductible/coinsurance design. We call this our “INSURED HRA”
- 9. The “GAP 3.0 ” Strategy “Duplicate coverage”
- 10. Sample Case – GAP 3.0 “Duplicate Coverage”
- 11. Sample Case – GAP 3.0 “Duplicate Coverage” Census Status Medical Total 58 Employee $471.11 $471.11 23 2 Person $1,130.67 $1,130.67 10 Family $1,366.19 $1,366.19 91 $66,991.69 $66,991.69 Census Status Medical Total 58 Employee $494.39 $494.39 23 2 Person $1,186.55 $1,186.55 10 Family $1,483.18 $1,483.18 91 $70,797.07 $70,797.07 Census Status Medical GAP 3.0 Total 58 Employee $320.36 $101.84 $422.20 23 2 Person $768.88 $195.05 $963.93 10 Family $961.09 $276.52 $1,237.61 91 $45,876.02 $11,926.59 $57,802.61 $155,933.52Annual Savings Versus Renewal Plan SAMPLE GAP 3.0 COMPANY Current Plan: BCBS $500 DED/20% TO $1500 Renewal Plan: BCBS $500 DED/20% TO $1500 BCBS $5K DED/2.5 COINSURANCE + GAP 3.0 = $500 DED/20% TO $1500
- 12. The “GAP 4.0 ” Strategy “Improve Coverage” Increase major medical deductible/coinsurance to lower premiums. 2 “Bucket” approach Bucket 1 Inpatient Benefits 1st dollar Inpatient benefits. GAP 4.0 covers the entire deductible/coinsurance . 100% Inpatient benefits- 1st dollar coverage Bucket 2 Outpatient Benefits 1st dollar Outpatient benefits. GAP 4.0 covers Outpatient services up to 70% Inpatient benefits- 1st dollar coverage We are calling this the “REVERSE HRA”
- 13. The “GAP 4.0 ” Strategy “Improve Coverage” Increase major medical deductible/coinsurance to lower premiums. BCBSM SB 4000 HRA MCLAREN POS 3K DED/3KCOINSURANCE UHC ALLSAVERS TOTAL HEALTH POS
- 14. The “GAP 4.0 ” Strategy “Improve Coverage”
- 15. Sample Case – GAP 4.0 “Improve Coverage” BCBS $500 DED/20% TO $1500 BCBS 5K DED/20% + GAP 4.0 Primary $30 Copay $30 Copay Specialist $30 Copay $30 Copay Chiropractic $30 Copay $30 Copay X-Ray 80% After Deductible 100% to $5250, 20% thereafter Blood/Lab Tests 80% After Deductible 100% to $5250, 20% thereafter Deductible per Calendar year $500 Per Person $0 inpatient/$0 outpatient In Patient Services 80% After Deductible 100% Out Patient Services 80% After Deductible 100% to $5250, 20% thereafter MRI's/CT/PET Scans 80% After Deductible 100% to $5250, 20% thereafter Emergency Room $100 Copay $100 Copay Urgent Care $50 Copay $50 Copay Out of Pocket: $2000 Per Person $0 inpatient/$2250 outpatient Prescription Drugs Covered - Tiered Copays Covered - Tiered Copays SAMPLE GAP 4.0 COMPANY YOUR BENEFITS AT A GLANCE Office Visits Hospital - In & Out-Patient Services Deductibles capped at two per family
- 16. Sample Case – GAP 4.0 “Improve Coverage” Census Status Medical Total 58 Employee $471.11 $471.11 23 2 Person $1,130.67 $1,130.67 10 Family $1,366.19 $1,366.19 91 $66,991.69 $66,991.69 Census Status Medical Total 58 Employee $494.39 $494.39 23 2 Person $1,186.55 $1,186.55 10 Family $1,483.18 $1,483.18 91 $70,797.07 $70,797.07 Census Status Medical GAP 4.0 Total 58 Employee $320.36 $88.19 $408.55 23 2 Person $768.88 $183.43 $952.31 10 Family $961.09 $255.92 $1,217.01 91 $45,876.02 $11,893.11 $57,769.13 $156,335.28"Annual" GAP 4.0 Savings Versus Renewal Plan SAMPLE GAP 4.0 COMPANY Current Plan: BCBS $500 DED/20% TO $1500 Renewal Plan: BCBS $500 DED/20% TO $1500 BCBS $5K DED/2.5 COINSURANCE + GAP 4.0 = $7500 inpatient/$5250 outpatient
- 17. How We Communicate Benefits to Employees We create 30 second video clips of every employee benefit your company offers and upload them to your own Online Channel. Employees can view 24/7 on computers or smartphones. Scan here to view our Smartphone Video Benefit Tool or visit: Www.vimeo.com/channels/abctoolcompany
- 18. Call Chelten Benefits Group 248-464-6544
Editor's Notes
- Thanks for agreeing us to visit and explain what we believe are 2 great strategies to present to your clients to save money while maintaing or even improving benefits. We appreciate the time and promise to be done in 15 minutes with enough extra time for questions. Hopefully, at the end of this call, however, you will be suitably impressed enough with these new strategies, enough so to begin quoting your best clients cases with us.. That’s our goal. Let’s get started.
- Everyone today is being forced to do more with less. Health Insurance premiums continue to increase regardless of promises from Washington. Employers continue to cost shift their increases to employees.Many Employers have an aging workforce adding more upward pressure on insurance premiums.Every firm 50+ needs to be in compliance with ACA, even now.
- So, what can you do? Well, first, you can do nothing, hope for the best, and then watch your insurance costs go up every year and then dump your employees in 2014 over to the Public “Exchanges”. The problem there is we still don’t know how good the benefits will be in the Exchanges nor how much they will cost. So, meanwhile, many Employers are being told to increase their employees deductibles, coinsurances, and premium contributions to offset increases. Still others are being told to move everyone to “managed care” arrangements where choice of Physicians and services are restricted. But, as you will see shortly, there is another strategy that is safe, can guarantee savings to the penny and still maintain and even improve on current benefit levels. It’s called GAP 3.0 and GAP 4.0 Insurance and it’s completely compliant with National Health Reform..
- GAP insurance coverage, whether 3.0 or 4.0 , combines the use of a group supplemental insurance plan with a high deductible major medical plan.
- As you can see here, a portion of your Medical Insurance costs go to paying for the high deductible health plan, while another portion goes to paying the GAP insurance. The result: Same (or better)coverage as you have currentlySame (or less) employee out of pocket expensesLower annual costsComplies with National Health ReformAnd savings that typically average up to $2,000 annually per employee. So, if you have 100 employees, you can often see savings upwards to $200,000 annually with no loss of benefits, no financial risk to your Company and no change in Insurance carrier. That’s pretty impressive, you have to agree
- While this GAP strategy may seem new to you, it actually has similar examples in general business and employee benefits alike. Most of us have friends or family members covered by Medicare. In order to fill the gaps in coverage found in Medicare Parts A & B, seniors routinely purchase what is called MediGap coverage. As a group, Seniors are generally the heaviest users of medical care, but the combination of Medicare plus their Medigap plans is the reason Seniors love their health plans. Today, we recommend Employers buy 3rd and 4th generation medical GAP coverage for their workers the same way Seniors buy their MediGAP supplemental coverage . *
- Here’s how it works:Employees receive two insurance cards; one for Major Medical Plan and one for GAP Plan. They show both every time they use medical services.If the service is covered by Major Medical but is subject to the new high deductible, employee’s bill will be paid by the GAP plan.
- GAP 3.0 is a strategy where an Employer wishes to maintain their existing benefit plan but still save valuable premium dollars.First, we increase your major medical deductible to as high as we can. This lowers your health insurance premiums-it’s similar to what happens to your personal auto policy when you raise your auto deductible. Here, you can see several Medical carriers we are currently using here in Michigan that offer significant “spread” between low deductible premium plans and these high deductible versions.Next, we “backfill” your new high deductible and coinsurance limits until we have duplicated your existing low deductible benefit levels.
- For example, let’s say you are offering your employees a $1500 deductible, 100% plan. GAP 3.0 would have you raise your deductible to $5,000, then backfill your deductible to your desired employee responsibility, in this case, $1500.So, here, we duplicate existing benefits and shortly, we’ll give you a real life example of where we implemented this strategy.. For now, you get the idea, right?
- Let’s compare copays, deductibles and out of pocket limits. Identical, aren’t they? Same copays, same deductibles, same benefits for $155,000 less!This is a great option for groups over 50 lives where management doesn’t want to modify benefits, just lower costs, keeping benefits identical to current ones..
- Here’s a recent case where we presented both GAP 3.0 and GAP 4.0.This was a 91 person Employment services company with Blue cross. They offered their employees a $500 deductible 80/20 plan. Their current monthly premiums were just under $67,000.At renewal, their premiums increased to just under $71,000, a 6% increase. Normally, any agent might have just suggested the Employer pay the additional premium to keep the benefits the same. I mean, what else could you do other than increase employees contributions or deductibles?What we did was recommend a $5,000 high deductible Blue Cross 80/20 plan. We inserted a GAP 3.0 product that covered everything within the new deductible so the employees still had a $500 deductible 80% like before.How much did we save this client? We saved them $155,933.52- versus their renewal. We even came in $110,269 under their current rates! Let’s compare copays, deductibles and out of pocket limits. Identical, aren’t they?.
- GAP 4.0 is a different strategy; one where an Employer wishes to enhance their existing benefit plan but still save valuable premium dollars.First, we increase your major medical deductible to as high as we can. This lowers your health insurance premiums-like before, it’s similar to what happens to your personal auto policy when you raise your auto deductible. Next, we “backfill” your new high deductible and coinsurance with GAP 4.0 benefits.GAP 4.0 provides 2 buckets of coverage 1 for inpatient services, another for Outpatient services.GAP 4.0 provides 1st dollar benefits for inpatient services. This can be used to pay for any deductible and/coinsurance as much as $10,000. Next, GAP 4.0 provides 1st dollar benefits for outpatient benefits, up to 70% of whatever benefit we purchased as inpatient benefits. Employees get upfront, no deductible, 100% inpatient benefits, and upfront, no deductible outpatient benefits up to 70% of whatever amount we select for Inpatient benefits! GAP 4.0 eliminates most of the medical cost fear employees have today with their deductible/coinsurance plans.
- GAP 4.0 works great with these carriers and plans. The Simply Blue product has a skimpy office visit benefit. Everything but the exam is subject to a deductible and coinsurance. GAP 4.0 covers all those services within the doctors’ office including xrays, lab tests, surgical procedures.McLaren has a great doctor's’ office visit benefit and smaller deductible so we can gap benefits to fill deductibles AND consurances. It actually multiplies the 100% outpatient benefits to around $7,000!Allsavers has 96 differenct variations with its plans, all with different deductibles and consurances. We can fill those to offer 1st dollar coverage at a very affordable cost.TotalHealth Care has low rates and a Cofinity benefit option in its Select 09 POS. Out GAP 4.0 fills those deductibles and consurances so the plan becomes even better at THC prices.There are more carriers with more options. Just call us to find out what is working best.
- Here’s a illustration of GAP 4.0 . Like our earlier example current benefits are $1500 deductible/100%. We increased the Employers’ plan to a $5,000 deductible and backfilling it with $5,000 of Inpatient GAP 4.0, and $3500 of Outpatient GAP 4.0 benefits. This gives employees 1st dollar coverage for inpatient services and 1st dollar coverages for the first $3500 of outpatient services. employees are only responsible for a $1500 deductible AFTER receiving the first $3500 upfront! Again, Full inpatient, full outpatient up to $3500 of benefits. Pretty impressive.Again, in a little bit, we will show you how much we can save with this strategy. For now, you get the idea, right?
- Here we have the same client offering the same $500 deductible 80/20 Blue Cross plan we illustrated earlier with GAP 3.0. They were intrigued by the idea of enhancing their benefits so employees would now have 1st dollar coverage without deductibles and coinsurances.So, here we increased the plan deductible to the BCBS 5k deductible plan and enrolled the group with a $7500 In patient GAP 4.0 plan. The result? Employees now receive 100% inpatient benefits covering both the potential $5,000 deductible and the $2500 coinsurance thereafter.For Outpatient benefits we provided $5250 Outpatient in coverage, which is 70% of our $7500 inpatient benefit design. Again, as with Inpatient benefits, Outpatient benefits include no deductible, 100% coverage up to $5,250, and only then 20% coinsurance.Lets’ compare line by line. (go through a few lines of benefit comparison)
- GAP 4.0 saved this employer $156,335.28- versus their renewal rates. And, similar to GAP 3.0, we also came in $110,671 under their current rates! Now, while GAP 4.0 provides great benefits, it isn’t the right choice for every employer. However, in this case, the Employer decided to enhance his employee benefit design .Everyone won here. The employer saved substantial premium dollars, the employees received valuable 1st dollar benefits for both inpatient and outpatient services. And we knew exactly what the savings would be UP FRONT. The Employer saved money without risk, while the employees improved their benefit levels. .
- In order for any Employee Benefit plan to succeed, it needs to be communicated easily and effectively to employees and their families. Plus, every new hire should be able to understand the benefits without additional HR personnel time being spent needlessly.So, for every client, we create multiple 30 second video clips of every benefit a Employer offers its employees and we make them available on Smartphones and Personal Computers. Health, Life, Dental, Disability, whatever benefits you offer, including this new GAP 3.0 or GAP 4.0 strategy we’re talking about today, we simplify and communicate easily whenever employees and their families need information, its available in bite size video clips. To our knowledge we are the only firm that offers every different benefit on one video platform. Your employees will love this service.
- today, we have described two GAP strategies, either of which might fit your clients and prospects needs to save money while maintianing or improving benefits..we believe GAP 3.0 and GAP 4.0: Can Save your clients up to $2,000 annually per employeeMaintain or improve existing employee benefitsMaintain existing current carriersEliminate any Employer Financial risks. and both are completely compliant with national Health Reform At the beginning of this call, I told you that my goal here was to interest you enough to earn the opportunity to quote business with you. Hopefully, we have succeeded.Now, feel free to ask any questions.