HomeMy WebLinkAboutPACKET Town Board Study Session 2010-08-2414 LE NdULKE>/ STUDY SESSION TOWN BOARD Tuesday, August 24, 2010 4:30 p.m. Room 202 & 203 170 MacGregor Ave. AGENDA 4:30 p.m. - Self Insurance Presentation. Dutch Ross, Ross Benefits Consulting. - Open Discussion. • Economic Development Group • Affordable Housing • Fee Waiver Policy - Next Study Session Agenda. 7:00 p.m. - Board Meeting. NOTE: The Town Board reserves the right to consider other appropriate items not available at the time the agenda was prepared.
Cynthia Deats From: Admin iR3045 Sent: Wednesday, August 18, 2010 2:50 PM To: Cynthia Deats Subject: Job Done Notice(Send) ***************************** *** Job Done Notice(Send) *** ***************************** JOB NO. 3160 ST. TIME 08/18 14:37 PGS. 1 SEND DOCUMENT NAME TX/RX INCOMPLETE ----- TRANSACTION OK 6672527 Greg White 5869561 KEPL 5869532 Trail Gazette 5861691 Channel 8 6353677 Reporter Herald 2247899 Coloradoan 5771590 EP News ERROR ----- 1
TOWN oF ESTES PARI<L Memo Com~Unity Ddvelopm@ktff Of' -r~9 ' 4;4:>9' .21:31 ..? 1. ~ 1. To: Honorable Mayor Bill Pinkham Board of Trustees From: Administrator Halburnt Date: August 18,2010 RE: Upcoming Work Sessions Sept. 14 Review Problem Statement Effectiveness Sept. 28 SOPA Review of Fundraising Efforts October 12 Community Garden October 26 Fire District MOU Renewal November 23 Open Discussion Not scheduled Joint Housing Project - EPHA & TOE Fish Hatchery Property Historic Preservation draft ordinance Town Board Meeting Procedures - draft policy Purchasing Policy = only buy products built by American Companies and built in the USA Medical Marijuana Public Input Plan
Comparison of Funding Approaches Fullv Insured Self-Funded Risk Employer Carrier Cash Flow Variable Level Reserves Held by employer, obligation Held by carrier of the plan Claim Liability 125% of expected 100% of premium Claim Decisions Administrator/employer Carrier Expenses Premium taxes reduced Premium (includes all Claims administration outlined for SFEB) Stop loss cost Network fees Actual claim dollars Terminal Liability Employer Carrier Internal Administration Some staff time required Single payment Plan Design Set by employer-flexible Set by insurance carrier Compliance with Federal Federal and state Regulatory Mandates Managed Care Available Available
PROS AND CONS OF SELF-FUNDING vs. FULLY INSURED PROS Self-Funded Fullv Insured 1. Savings occur through reduced state 1. Cash flow is even and budgetable in the premium taxes. form of monthly premiums that do not fluctuate with claims experience. 2. Plan is exempt from state insurance 2. Insurance Company acts as "buffer" regulations regarding required benefits. between employer and employees on claim decisions. 3. Employer earns interest on claim reserve 3. Internal administration is simpler; limited to dollars. premium payments monthly. 4. Pay as you go approach, employer pays 4. Insurance Company has responsibility for for claims only after they have been employee booklet and benefit updates and incurred and processed - employer costs compliance. lower in low claims months. 5. Employer gains cash flow due to lapse 5. Insurance company has pre-packaged between checks issued and checks program for administration, network and cleared. utilization review. 6. Flexible plan design - it is the employer's 6. Generally, more advanced disease plan. management/large case management. 7. Employer has flexibility in selecting vendors for: - claims administration - provider networks - utilization review - stop loss coverage - pharmacy benefit management 8. Costs are less. 9. Better, more frequent claim reports and detailed data.
PROS AND CONS OF SELF-FUNDING vs. FULLY INSURED CONS Self-Funded Fully Insured 1. Unpredictable cash flow - varies 1. Lack of flexibility on plan design, claim monthly depending on actual claims decisions, etc. paid. 2. More difficult internal administration: 2. Employer doesn't benefit if claims are bank reconciliation, claims appeal low. process, SPD preparation, multiple vendors. 3. Increased liability for claims 3. Benefits can be dictated by carrier. decisions - no third party "buffer". 4. Increased need for underwriting 4. Less thorough claim reports. services for rate calculation, reporting, claim projections, etc. 5. If "run-out" is not funded, termination can 5. If one component of the plan isn't be more difficult. working, must change total plan to correct. 6. Overall cost could be greater in a 6. Overall costs are more. particular year, if claims experience is poor in a particular year.
, ASO vs. Unbundled (TPA) APPROACHES TO SELF-FUNDING Third Party Claims Administration Administrative Services Only (ASO) 1. Claims administration by independent 1. Claims administration by insurance third party provider generally requires company, which offers "bundled" "unbundled" approach to purchasing the approach to required services. required services. 2. Cost is less; services are reduced. 2. Cost is greater due to providing more services. 3. Usually contract separately with independent 3. Use insurance company provider provider networks. networks, which tend to have greater penetration than independent networks. 4. Purchase stop loss coverage from any 4. Purchase stop loss coverage from the company providing this coverage. insurance company. 5. Services of TPA's usually are limited; 5. Insurance company provides greater claims advice/assistance is minimal. assistance on claims issues, practices, use of health care consultants, information on claim practices. 6. Significant flexibility 6. Insurance company may be less flexible - do it "their way" unless told otherwise.