This document provides information about different options for employers related to health insurance, including group captives. It discusses the benefits of self-funding health plans and using a group captive structure to spread risk across multiple employers. This allows smaller employers to gain advantages typically only available to large companies. The document outlines Berkley's group captive program, which combines self-funding, a group captive structure, and collaborative health risk management. It provides examples of potential cost savings and financial scenarios for employers participating in a group captive program compared to traditional insurance. The summary also discusses characteristics of employers that may be good candidates for a group captive.

3. IF YOU SPENT LESS ON INSURANCE…
What would you invest in?

4. INSURANCE BURNOUT
The System Always Wins
Hugh Devlyn | Director of Benefits, HNI

6. * Percentage of employers that have tried each technique

7. INSURANCE BURNOUT
SUMMARY
Choose Your Path
1. Drop coverage
2. Stay the course
3. Take control and reduce dependency

8. INSURANCE BURNOUT
SUMMARY
Take a Stand on 3 Things
1. Ownership Mindset
2. Financial Responsibility Model
3. Consumer-Centric Care (C3)

9. CAPTIVATE ONLOOKERS
How Captives Drive Performance
Shawn Lanter | Director, Berkley Accident + Health

10. CAPTIVATE ONLOOKERS
AGENDA
1. Group Captives – What, Why, How, Who
2. The Market Climate
3. Berkley’s Group Captive Program
4. Financial Scenarios
5. Other Considerations

11. WHAT IS A CAPTIVE?
A Captive is a medium for taking risk.
It can be formed by
a single company Or multiple companies
Single Parent Captive Group Captive

12. WHAT IS A GROUP CAPTIVE?
A Group Captive can be made up of companies
in the same industry or different:
Same industry Different industries, sizes,
or regions
Closed membership Open membership
(Homogeneous) (Heterogeneous)

13. WHY DO GROUP CAPTIVES EXIST?
Group Captives exist to give employers:
 Control
 Lower overhead/inefficiency from insurance carriers
 Long-term stability
 Capacity
 Data transparency
 Collaboration/best practices

14. WHAT IS BERKLEY’S GROUP CAPTIVE?
Group stop-loss captives combine three strategies:
EmCap
Self-funded
health plan
Group
captive
structure
Collaborative
health risk
management

15. Today, nearly all large companies self-fund their health plans
13% 15% 17%
13%
10% 10%
13% 13% 12% 12%
15% 16%
13% 15% 16%
60%
67%* 66% 66%
72% 73% 75%
78% 77% 77% 77%
83%* 82% 81% 83%
0%
20%
40%
60%
80%
100%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Large Firms (200+ workers)
Small Firms (1-199 workers)
Notes: For 2000, the large firm estimate is statistically different from the estimate for the previous year shown (p<.05). In 2006, funding status was not asked of firms with
conventional plans, due to a change in the survey questionnaire. Therefore, conventional plan funding status is not included in the averages in this exhibit for 2006.
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2013, www.kff.org.
WHO SELF-FUNDS?

16. PROS OF SELF-FUNDING
Traditional Advantages
• Risk is limited with stop-loss reinsurance
• Cash flow advantages;
no pre-funding of claims with advantage
to employer in favorable claims years
• Data transparency (detailed utilization
data) allows employers to identify issues
and promote healthier cultures
• Multi-state plan design; benefit flexibility;
ease of administration
• Lower fixed costs
• No premium tax
• No insurance company profits
• Lower long-term cost
Additional Advantages Under ACA
• Not required to provide coverage with minimum
essential benefits
• Not required to participate in
a risk-adjustment system
• Not subject to provisions,
such as Medical Loss Ratio requirements and
premium increases

17. Challenge: How do you create the large employer advantage for small
and midsize companies?
• Self-funding provides benefits typically enjoyed only by large
companies:
o Control
o Transparency
• Group Captives can provide stability by spreading risk across its
members
• Health risk management can lower short- and long-term cost
trends:
o Opportunity to control costs
WHY DON’T MORE EMPLOYERS SELF-FUND?

18. ANNUAL CLAIMS
Low
High
PROBABILITY
LowHigh
Mid-Size Self-Funded Health Plan
WHY DON’T MORE EMPLOYERS SELF-FUND?

19. GROUP CAPTIVES MITIGATE VOLATILITY
ANNUAL CLAIMS
Low
High
PROBABILITY
LowHigh
Shift expected due to law of large numbers
Self-Funded Health Plan moving into a Group Captive

20. ANNUAL CLAIMS
Low
High
PROBABILITY
LowHigh
Shift expected due to risk management results
Self-Funded Health Plan moving into a Group Captive
with Health Risk Management
GROUP CAPTIVES + HEALTH RISK MANAGEMENT

21. GROUP STOP-LOSS CAPTIVE
Group Captives bring it all together by allowing small
employers to act like large employers:
1. Traditional advantages of self-funding
2. Additional advantages with ACA
3. Best practices for health risk management
4. Collaborative financial strength
5. Greater scale for predictability
6. Buy less Stop Loss insurance (higher deductible)

22. Target employers for a Group Stop Loss Captive:
 50-1,000 employees eligible for health benefits
 Forward-thinking management team
 Good communication with employees on health care costs
 Willing to implement robust health/wellness programs
 Financially stable and willing to take on a portion
of the risk for their health plan
WHO SHOULD CONSIDER A CAPTIVE?

23. RISK LAYERS: CLAIMS EXPOSURE/COSTS
Retain. Share. Transfer.
Group Captive Layer
Premium + Non-Premium Funding (collateral)
Employer
1
(SFR)
Employer
2
(SFR)
Employer
3
(SFR)
Employer
4
(SFR)
Employer
5
(SFR)
Berkley Retained Layer
Retained Excess + Captive Aggregate Coverage + Fixed Costs
No risk sharing
Employers pay
for claims up to
Stop Loss
(Individual or
Aggregate
claims)
Employer Layer
Risk shared
among members
in captive
Risk assumed by
Stop Loss insurer
>$250k individual
and captive max

24. Retain. Share. Transfer.
FREQUENCY OF
CLAIMS
PERINDIVIDUAL
BERKLEY LIFE & HEALTH
Individual
$25,000
per
Individual
MEMBER RETENTION
Aggregate
110%-125%
of expected claims
STOP LOSS POLICY STRUCTURE

25. Risk Layer Funding
Retain. Share. Transfer.
BERKLEY LIFE & HEALTH
Individual
$25,000 per
Individual
MEMBER RETENTION
Aggregate
110%-125%
of expected claims
FREQUENCY OF
CLAIMS
PERINDIVIDUAL
EXPENSES
Individual
$25,000
per
Individual
MEMBER RETENTION
(SFR)
Aggregate
110%-125%
of expected claims
Berkley Life & Health retained excess,
expenses, TPA
Up to $250k
individual
Premium
funding
Non-
premium
funding
(collateral)
GROUP CAPTIVE

26. LARGE CLAIM EXAMPLE
Employer has a $600,000 claim from a premature birth:
BERKLEY LIFE AND HEALTH
Stop Loss policy reimburses
$575,000 to the employer
GROUP CAPTIVE reimburses
Berkley for $225,000
EMPLOYER funds first $25,000
through its self-funded retention

27. Sample EmCap Layers vs. Average
Results
Self-Funded
Retention
70%
Captive Layer
25%
Collateral 5%
Expenses 15%
COSTS, RESULTS, AND FINANCIAL SCENARIOS

28. Sample Account:
200 Lives, Fully Insured, $25K Specific EmCap Proposal
Sample Account EmCap Proposal
% of Fully Insured
Premium Pie
Insured Premium $2,500,0000 100%
Expenses $375,000 15% FIXED
Self-Funded Retention $1,750,000 70% VARIABLE
Group Captive Retention $625,000 25% VARIABLE
Collateral $125,000 5% VARIABLE
Variable Costs $2,500,000 100%
Projected Minimum $375,000 15%
Projected Maximum $2,875,000 115%
COSTS, RESULTS, AND FINANCIAL SCENARIOS

29. EmCap Layers
Self-
Funded
Retention
70%
Captive
Layer
25%
Collateral
5%
Expenses
15%
Berkley EmCap
programs are averaging
10-15% BELOW SFR
Berkley EmCap programs
are averaging 7-9% CAPTIVE
LAYER SURPLUS in 2012
Surplus at Captive Layer =
No collateral draw
Past EmCap results are not a predictor of future results. Past performance does not guarantee
future results. Current performance may be lower or higher than the performance data shown.
COSTS, RESULTS, AND FINANCIAL SCENARIOS

30. Sample Results:
200 Lives, Fully Insured, $25K Specific EmCap Proposal
* Past EmCap results are not a predictor of future results. Past performance does not guarantee future
results. Current performance may be lower or higher than the performance data shown.
**All unused funds are returned to the member.
Sample Account EmCap Proposal 2012 Avg Results*
Expenses $375,000 FIXED $375,000
Self-Funded Retention $1,750,000 85% $1,487,500
Group Captive Retention** $625,000 91% $568,750
Collateral $125,000 0% $0
Total Cost $2,431,250
vs. Insured Premium $2,500,000
EmCap Total Savings $68,750
Potential savings opportunity, plus data, stability, and transparency
COSTS, RESULTS, AND FINANCIAL SCENARIOS

31. CAPTIVATE ONLOOKERS
SUMMARY
Member organizations take control of their costs
Cumulative effect of retention = Long-Term Plan
1. Retain positive variability
2. Spread negative variability
Increased risk tolerance with experience/data
Surplus potential = collateral carryover

32. CAPTIVATE ONLOOKERS
SUMMARY
"Pay Yourself" leveraged trend
Harness group purchasing power
1. TPA/Admin Fees
2. Network Contracts
3. Pharmacy Benefit Manager contracts (PBM)
4. Health risk management services

33. GEAR UP YOUR NETWORK
Scott Austin
Senior VP, Aurora Health Care
Matt Shumlas
Director, Anthem BCBS

34. ACCESS TO QUALITY CARE
• Aspirus
• Aurora Health Care
• Bay Area Medical Center
• Belin Health
• Children’s Hospital of Wisconsin
• FortHealthCare
• Gundersen Health System
• Meriter
• ProHealth Care
• Sauk Prairie Healthcare
• ThedaCare
• University of Wisconsin Hospitals,
Clinics & American Family
Children’s Hospital
• Watertown Regional Medical
Center
Covering 45 counties &
80% of Wisconsin’s population
Providers that consistently score in
top quadrant measuring quality & cost
Convenience when
traveling
National & International
Coverage with Blue Cross
and Blue Shield provider
network at in-network rates
and benefit levels.
0.94
0.96
0.98
1
1.02
1.04
1.06
1.08
1.16
1.14
1.12
1.10
1.08
1.06
1.04
1.02
1.00
0.98
0.96
0.94
0.92
0.90
0.88
0.86
0.84
MoreQualityAchievements
Greater Efficiency
High Quality Low
Efficiency
High Quality
High Efficiency
Low Quality Low
Efficiency
Low Quality High
Efficiency
Using WHIO 10

35. GEAR UP YOUR NETWORK
SUMMARY – ANTHEM/AURORA
Builds on a trusted relationship
Evolution of pre-existing programs
Strong track record of:
• Better patient experience
• Higher employee engagement
• Health system efficiency
• Clinical quality (superior in the market)

36. Bruce Weiss, MD, MPH
VP, Health Care Strategies, UHC
GEAR UP YOUR NETWORK
Geoff Schick
Executive Director, Business Health Care Group

37. UHC & BHCG: PARTNERSHIP MISSION
UnitedHealthcare and BHCG seek a health care market where providers
compete to meet patient needs by delivering quality care at the best
cost. Patients are empowered and held accountable for their health
outcomes and improved purchasing decisions through the use of
resources and supported by plan design.
Optimal
Health Care
Market
Place
37

38. UNITEDHEALTH PREMIUM PHYSICIAN
DESIGNATION
•Longest running physician designation program (2005)
• National, evidence-based & specialty society standards
• Evaluate doctors on more than 75 conditions and 300 measures
• Physicians who fail to meet quality not eligible for cost efficiency
• Quality evaluations nationally consistent
• Accounts for more than 80% of all medical costs*
Proprietary Information of UnitedHealth Group. Do not
distribute or reproduce without express permission of
UnitedHealth Group.
38
*Data as of First Quarter 2015
TIER
1

39. GEAR UP YOUR NETWORK
SUMMARY – UHC & BHCG
Balanced Approach
High Performance Network Strategy
It takes a village

40. GEAR UP YOUR NETWORK
Kurt Janavitz
CEO, Integrated Health Network

41. WHAT IS IHN?
IHN is a broad-choice network of major
Wisconsin health systems working together
to deliver great health care.
• Eight Owner Members
• 53 hospitals
• 8,400+ providers
• 1,180 clinical locations
• 100+ Associate network members
IHN’s goal is to be a trusted health care management partner to employers
and their employees.

42. DIFFERENCE OF BEING PROVIDER-LED
Local, provider driven
care coordination
Opportunity to leverage
risk sharing mechanisms
Onsite offerings
integrated with care
delivery system
Ability to prioritize
patient access
Better incentive to be
your long-term, trusted
health care advisor
Effectively coordinate
care, even when patients
seek care across different
health systems
Collaboration allows
learnings to be leveraged
across Members

43. GEAR UP YOUR NETWORK
SUMMARY - IHN
Broad choice, integrated network offering
Model that supports sustainable, long-term savings
High quality, best-in-class coordinated care delivery
Bundled solutions or a la carte
Enhanced provider/patient relationships