Nonprofit Medical Benefits Association of Texas

AFFORDABLE BENEFITS PROGRAM FOR TEXAS NONPROFITS Presenter: Rose Mary Fry Nonprofit Benefits Association of Texas 2004 Overview       Background Potential Solution Program Design Program Implementation Conclusion Appendix 2 Health Care Program Background  Nonprofit entities have struggled to purchase health care for their employees due to the following facts:     Each entity had to be individually rated. No “economies of scale” exist to spread the risk by the insuring company regarding small individual entities, therefore; quoted or projected premiums for these groups are too expensive. Heath care costs in Texas are increasing at a rate of 2530%. Texas legislature is responding by changing the rules regarding associations and mandated coverages. 3 Background--Objectives      Provide affordable health care options for Texas nonprofit organizations. Ensure the plan is flexible enough to accommodate differences in employer‟s and employee‟s ability to pay. Include a menu of options for health care, dental and vision, and supplemental insurance coverage which the employer can select at their option. Provide easy and low cost administration. Allows employees to pay with pre-tax dollars. 4 Proposed Solution  Work with the Texas Nonprofit Management Assistance Network to sponsor a health benefit program with support of the Kronkosky Charitable Foundation and SWBC. The program includes:     Membership in the Nonprofit Benefits Association of Texas. Options regarding health care, dental and vision, and supplemental insurance coverage to address potential catastrophic concerns (cancer, major medical, etc.) A third party administrator to address the ongoing administration, billing and settlement of premiums. Web site which includes information, forms and applications. 5 Proposed Solution     Assumption: Each nonprofit organization is willing to fund at least 50% of the health plan cost per employee per month. Dental, vision and supplemental individual policies are available to the employee and their families which could be paid in part by the nonprofit employers. Third Party Administration (TPA) fees will be assessed to the association members. There are no pre-existing conditions for the health indemnity plan. 6 Conceptual Program Design Association provides Framework to bind Entities for group Insurance Joins Benefits COBRA Source, Inc. Report Summed by Org $ of Bill COBRA Info-- Nonprofit Organization Health Ins. Premium Employer Share Up to 50% pp & TPA Fee Pan Am/Cont’l Am USNow 500/1,000,2/4 $ $ $ Dental Select Vision & Dental Colonial Supplemental Ins. Bills $ $ Additional Premium Individual Share TPA establishes Sec. 125, Prepares documents, Files 5500, Bills entities, Remits Payment to insurers, Produces $ reports to Association by Org. & Employee Change-COBRA Enrollment Info. By Ind. & Group Individual funds $ through payroll Employee Enrolls at Colonial Group Meeting Receives Benefit 7 Program Design   Entities having group health insurance may wish to continue their plan. However, they or their employers may purchase additional insurance provided by this program to strengthen their existing plan. Entities with over 25 employees seeking traditional insurance options can be rated separately and quoted by SWBC‟s insurance carriers. A Third Party Administrator (TPA) will be contracted to set up a Section 125 plan, gather information for groups‟ claims experience, perform payroll deductions, facilitate reconciliation of invoices, produce reports, bill the entities for their portion, perform „single source‟ billing and payment to insurance companies, and recover administrative fees. 8  Program Design     Employees may pay for the voluntary products on a pre-tax or after-tax basis. General health indemnity plan through USNow Plans ranging from $87.65 (employee only Rx 500) to $396 (per family Rx 1000) per month or Traditional Major Medical Insurance (over 25 employees and willing to contribute 75% of premium -$250-$450 per employee per month to nearly $1000 per family per month). Dental & Vision Coverage  Provided by Dental Select Colonial Supplemental Portable Insurance products to be purchased depending on the need of each individual family to target their needs. 9 Program Design Proposed Health Coverage Program Design—Health USNow Options & Plans Features and Benefits PLAN FEATURES Employee Cost/mo Employee +1 Family Cost/mo Dr. Visits Rx Generic Co-Pay Oral Contraceptives Co-Pay Rx Brand Name Rx Max Benefit Wellness Care Accident Coverage Surgical Schedule Rate Anesthesia Hospital Admission Hospital Indemnity Intensive Care-30 days Substance Abuse-30 days Skilled Nursing-60 days/stay Mental Health Benefit Lab Test-Discounted if more Life Insurance AD&D Rx500 (B) $87.65 $159.55 $234.47 $60/Dr. visit, $300/yr $5 Discount Only Discount $400 pp/mo. $50/visit, 3 visit max Up to $500/occurrence $0 $0 No Separate Benefit $500/day, 500 days $1,000/day $250/day $250/day $250/day, $5000/year Unlimited # of tests; up to 70% off 1600 Tests $5,000 Rx1000 (B) $147.88 $276.03 $396.00 $75/Dr. visit, $450/yr $5 Discount Only Discount $400 pp/mo. $150/visit, $150 calendar max Up to $500/occurrence Up to $1500 $0 No Separate Benefit $1,000/day, 500 days $2,000/day $500/day $500/day $500/day, $5000/year Wellness Benefit Value $300/ yr Unlimited # of tests up to 70% off 1600 Tests $5,000 Program Design Appx. # USNow Providers*            Amarillo Austin Corpus Christi Brownsville Dallas El Paso Fort Worth Houston Lubbock San Antonio Tyler 573 705 674 504 725 747 712 720 242 671 589 *Various Specialties within 30 mile radius 12 Program Design USNow Underwriting Health Indemnity Plan       Eligible groups must have at least 25% participation of eligible employees not covered by other health plans. Minimum eligible group size is 2. Nonprofit Benefits Association of Texas structure results in a 20% decrease in premiums compared to small group rates. No pre-existing conditions including maternity. Guaranteed Issue, cannot be turned down. No minimum age (age 65+ may reduce Medicare/Medicaid benefits), employed 2mo. work at least 30 hrs/week 13 Program Design Dental Select Dental & Vision Plan Program Design Dental Coverage (Any Dentist) Plan Summary of Benefits Preventive: Routine cleanings(2 per calendar year), exams, fluoride (14 & under), and x-rays. Coverage 100% No Deductible Applies Basic: Fillings, sealants (14 & under), and oral surgery. 80% Deductible Applies Major: Crowns, bridges, periodontics, endodontics and dentures. (Endo is basic for groups 19+). 50% Deductible Applies Orthodontics: **Must have 6+ in group to be eligible for Ortho. Deductible: Per person, per calendar year, max 3 per family. Applies to all basic and major services 50% $50 per person $150 family max Waiting Periods: Basic: Major: Orthodontic: 3 months 12 months 12 months $1000 Maximum Benefit: Applies to preventive, basic, and major services. Per person, per calendar year. Dental Select Dental Rates  Austin, San Antonio, and South to Valley     Employee: Employee & Spouse: Employee & Child(ren): Employee & Family: Employee: Employee & Spouse: Employee & Child(ren): Employee & Family: $23.00 $49.67 $53.89 $77.62 $26.00 $56.76 $61.59 $87.97 16  Houston and Dallas     Access Vision Plan     Available to each Insured purchasing dental coverage for an additional $2 per month. Vision Access is a fee for service discount plan, not an insured product. No maximums or limit on number of visits and no claim forms. Discount on laser vision correction surgery. 17 Program Design Colonial Supplemental Insurance Coverages Colonial Supplemental Insurance Coverages       May be elected on a pre-tax or after-tax basis. Policies are chosen by the insured according to the need of insured and/or family. This is an indemnity policy. It pays in addition to other insurance companies so multiple payments may be made from all sources for the same charge. The insured must submit paperwork except for wellness claims which can be quickly called in over an 800# giving date, doctor, and procedure. Policies are portable and guaranteed renewable. 19 Program Design Colonial Supplemental Insurance Coverage Employee Examples/mo.*       Accident (Plan 1, Hosp & Screen Riders) $23.75 Short-Term Disability (14 day elimination period 6 month benefit) $47.59 Cancer (Level 4, Wellness Benefit $125) $29.15 Critical Illness ($50,000 w/Health Screen) $20.00 Life  Level Term ($100,000 w/ $10,000/ Child) $34.66  Universal (Min. 4% Return, $50k Inc. Death Benefit) $56.00 *Assumes Good Health and No Other Conditions 20 Program Design TPA—David K. Young  Third Party Administration—$5 per employee per month       Section 125 program establishment Determine Section 125 qualifying events Form 5500 filing Single source billing Payroll deduction service (if needed) COBRA Administration 21 Program Implementation        SWBC/Nonprofit Benefits Association of Texas will schedule an appointment to explain program details. Nonprofit director would obtain approval to join Nonprofit Benefits Association of Texas and participate in the program. SWBC/Colonial would schedule group and enrollment meetings. Employees would be enrolled. Nonprofit Benefits Association of Texas/SWBC would oversee quality. Claims would be paid according to the schedule of benefits from the insurance company. The TPA will handle billing, adjustment, and payment to the appropriate carriers. 22 Conclusion      Provide affordable health care options for Texas nonprofit organizations. Ensure the plan is flexible enough to accommodate differences in employer‟s and employee‟s ability to pay. Include a menu of options for health care, dental and vision, and supplemental insurance coverage which the employer can select at their option. Provide easy and low cost administration. Allows employees to pay with pre-tax dollars. 23 Appendix Colonial Accident Care Highlights Ambulance $100/trip  Air Ambulance $500/trip  Emergency Room $150/accident  Initial Dr‟s Visit $50/accident  Dislocation Schedule $100-$4,000  Fracture Schedule $50-$5,000  Surgery $1,000  Transportation $300/trip limit 3 trips  Lodging $100/night up to 30 nights  Hospital Admission $750/accident  Hospital Confinement $200/day up to 365 days  Hospital Intensive Care $400/day up to 15 days  Follow-Up Care, AD&D and Catastrophic Accident benefits  Coverage for any family combination *See outline of coverage for complete details  25 Colonial Short-Term Disability Highlights  Income protection due to accident or illness to help you pay:       Mortgage or rent payments Utility bills and other household expenses Food, clothing and other necessities Co-payments Medical costs not covered under other plans Travel and lodging expenses for treatment       Pays in addition to any other insurance you may have Benefits paid directly to you You choose the amount of disability benefit from 40%-662/3% Guaranteed renewable to age 70 Portable-”you can take it with you” if you change jobs Worldwide coverage and Waiver of Premium are included *See outline of coverage for complete details 26 Colonial Cancer Highlights      Nearly 2/3 of expenses are indirect costs Wellness Benefit (No lifetime limit) $125 (16 tests), follow-up $250 Bone Marrow Donor Benefit $1,000/donation Initial Diagnosis of Skin Cancer $200 Inpatient Benefits (No lifetime limit)    Hospital Confinement $400 for 70 days, $800 for 71 days+ (No limit) Ambulance - $150 ground, $1,000 air Full-time Nursing-in hospital, $150/day Radiation/Chemotherapy up to $400/day, Oral up to $1,200/month Antinausea Medication up to $80/day Blood/Plasma/Platelets up to $200/day and $10,000/yr Experimental Treatment up to $200/day and $10,000 lifetime  In or Outpatient Treatment Benefits     *See outline of coverage for complete details 27 Colonial Cancer Highlights Cont‟d         Hair prosthesis/External Breast Prosthesis up to $200/yr Supportive/Protective Care Drugs up to $200/day, $2,000/yr Medical Imaging up to $250/image, $1,000/yr Bone Marrow Transplant up to $10,000 lifetime Stem Cell Transplant up to $5,000 lifetime Braces, Crutches, Wheelchairs up to $250/yr Respirator up to $500/yr Transportation/Lodging Benefits (No lifetime limit)    Transportation $.50/mile or up to $1,500/trip commercial Companion Transportation $.50/mile (if separate) or up to $1,500/trip com. Lodging (you or adult companion) up to $75/day, 70 days/yr *See outline of coverage for complete details 28 Colonial Cancer Highlights Cont‟d  Surgical Procedures Benefits (No lifetime limit)       $70/unit x surgical unit value up to $5,000/procedure Anesthesia 25% of surgical benefit, if local up to $50 Second Medical Opinion up to $200/internal cancerous condition Reconstructive Surgery up to $2,400/procedure limit two per site Internal Prosthesis/Artificial Limb up to $2,000/device or limb Outpatient Surgical Center up to $400/day, $1,200/yr Skilled Nursing Care Facility up to $100/day Hospice up to $70/day Home Health Care up to $75/day, 30 days/yr or 2 x hospital days if greater Waiver of Premium if disabled longer than 90 days  Extended Care Benefits (No lifetime limit)     *See outline of coverage for complete details 29 Colonial Cancer Highlights Cont‟d  4 Optional Riders     Initial Diagnosis $1,000-$5,000 Progressive Payment $50/mo accumulation Death Due to Cancer $5,000 main insured Specified Disease up to $300/day for hospital confinement for 22 diseases *See outline of coverage for complete details 30 Colonial Critical Illness Highlights    Provides coverage/fills the gaps in your major medical coverage Coverage range $5,000-$50,000 in $1,000 increments Covered Critical Illnesses        Cancer-100% of face amount Heart Attack-100% of face amount Stroke-100% of face amount Major Organ Transplant-100% of face amount End Stage Renal Failure-100% of face amount Coronary Artery Bypass Surgery-25% of face amount Carcinoma In Situ-25% of the face amount  Health Screening Benefit $50/yr (No lifetime limit) *See outline of coverage for complete details 31 Colonial Life Highlights  Level Term       Death benefits do not decrease Two 10 year renewable terms $10,000-$150,000 (Bands 1&2) Only one 10 year term $150,001-$500,000 (Band 3) Living benefit provision up to 75% of death benefit up to $150,000 Stand along spouse policy (insured does not have to purchase policy) Riders Available  20 year spouse (Bands 1&2)  10 year spouse (Band 3)  Children added to either employee or standalone spouse $1,000$10,000    Convertible for 1-5 times amount of in-force children‟s rider Waiver of premium including riders if totally disabled to age 65 Accidental Death Benefit up to $150,000 *See outline of coverage for complete details 32 Colonial Life Highlights Cont‟d  Universal       Guaranteed 4% return with tax deferred growth, higher if market paying Death benefit and premiums may adjust as needs change Choice of level or increasing death benefits Portability (Can take it with you) Family coverage available Riders Available      Accidental Death Benefit Additional Coverage Term Rider for insured and/or spouse Guaranteed Purchase Option Waiver-of-Monthly-Deduction Accelerated Death Benefit *See outline of coverage for complete details 33 Program Design--Option B Rx1000 Typical Claims Comparison to Major Medical  Example of a Typical Claim 4-days In-patient hospital stay Beech Street PPO discount Total eligible amount billed to patient $34,784.83 $29,084.83 $ 5,700.00 $ 4,000 $ 1,700  How the USNow Program Works 4-days confinement benefit ($1,000/day) Insured responsibility  Traditional PPO Major Medical Benefit 4-days In-patient hospital stay Beech Street PPO discount Total eligible amount billed to patient $34,784.83 $29,084.83 $ 5,700.00 Major medical benefits allowed Insured’s responsibility (deductible & co-ins) $3,560 $2,140* * $1,000 deductible, 80/20 to $10,000 co-insurance (Insured’s responsibility calculation based on $5,700 billed to patient, less $1,000 deductible, less 20% of $5,700) 34 Program Design--Option B Rx500 Typical Claims Comparison to Major Medical  Example of a Typical Claim 4-days In-patient hospital stay PHCS PPO discount Total eligible amount billed to patient $34,784.83 $29,084.83 $ 5,700.00 $ 2,000 $ 3,700  How the USNow Program Works 4-days confinement benefit Insured’s responsibility  Traditional PPO Major Medical Benefit 4-days In-patient hospital stay PHCS PPO discount Total eligible amount billed to patient $34,784.83 $29,084.83 $ 5,700.00 Major medical benefits allowed Insured’s responsibility (deductible & co-ins) $3,560 $2,140* * $1,000 deductible, 80/20 to $10,000 co-insurance (Insured’s responsibility calculation based on $5,700 billed to patient, less $1,000 deductible, less 20% of $5,700) 35