Funding Strategies

A growing number of employers have moved into alternate funding strategies as a way to reduce costs and improve the quality of their employee benefits plan. Meeker Sharkey & Hurley can help you decide if alternate funding options are right for you.

Participating Contracts

  • Contract pays surpluses and recoups deficits

Minimum Premium

  • A combination of fully insured and self-insurance
  • Provides cash flow and premium tax advantages of self-funding
  • Maintains the protection of an underlying insurance plan

Level Funding

  • A self-insurance hybrid
  • Employer pays a level/steady amount each month as determined by the administrator

Administrative Services Only (ASO) – With Stop-Loss

  • A self-insurance arrangement where an employer group provides benefits with its own funds
  • Stop-loss coverage is purchased to mitigate the financial risk on both an individual and aggregate basis

Individual (Specific) Stop-loss (ISL)

  • Provides reimbursement in the event a plan participant has claims exceeding a pre-determined level

Aggregate Stop-loss (ASL)

  • Provides protection against high total claims for the health care plan
  • Coverage typically reimburses when claims exceed 100%-125% of the expected claim volume

Aggregating Specific Stop-Loss Deductibles

  • Two levels of a deductible to be satisfied before reimbursement
  • A second tier of liability over and above the individual deductible which reduces premium
  • Member claims over individual specific deductible accumulate toward the aggregate specific
  • Reimbursements are paid after the aggregating specific is satisfied

Stop-loss Tiered Polling Options

  • Designate a high and low pooling point
  • Employer responsible for claims up to the low pooling point
  • Stop-loss carrier responsible for claims exceeding the high pooling point
  • Liability is split 50/50 for claims between the high and low level

Stop-loss Incurred Accumulation

  • Contract issued on a 12/36 (incurred/paid) basis
  • Claims accumulate towards pooling point on date of service, not date claim is paid