Creative Funding Options

In this scenario, any organization or corporation can ask Modern Concepts to negotiate a fully funded “retro” contract with a health carrier. The health carrier will then do the following:

1) Set a claims usage target, on average around 70% paid 2) Negotiate the employee and dependant medical costs, called the Contract Rates 3) Instruct the insurance carrier to bill the client at 90% of the contract rates, called the Billed Rates

At year end, if your claims usage falls at, or below 70% paid, you owe no further premium. Renewal rates are issued at, or near previous rates. You are rewarded for your employees good claim usage. You just saved 10% of your premium!

However, in the event your claims actually exceed 70% paid, then you owe back the difference between the contract rates and billed rates, which is 10% of premium in this example. You should consider this a tax free loan from the insurance carrier, and with accrual accounting, be able to pay back the carrier the money you owe over the next three months. Your claims weren’t as low as you hoped, but the risk was worth it because you got the use of the carriers money for 12 months.

NETWORK ONLY / ASO PLANS

Various national health insurance health carriers will allow our clients to use their deeply discounted national network of providers, as long as that carrier will administer the actual claims payments. This type of plan, called Network Only, or Administrative Services Only (ASO), fits the needs of employers who have workforces in excess of 125 lives.

In addition, we have the option to use the Rx component of the carrier, or go to a Stand-alone Wholesale Rx Plan. Benefits can be designed to fit your needs using the carriers’ existing plan designs. The carrier will provide utilization review (UR) and reinsurance, or it can be purchased elsewhere.

This is a clean and unique One-Stop-Shop Approach, whereby the employee carries the carriers’ I.D. Card, and the employer realizes costs, easily 20% below the market, maybe more depending on claims usage. The carrier will only charge you for the administration of your claims and your reinsurance costs. Claims are paid out of a bank account that you fund monthly. You receive all of the carriers’ benefits, just like when you were Fully- Funded, except they have eliminated much of their “fat”. If your claims usage is good to normal you can’t help but have a minimum of 20% below market costs. Modern Concepts will compare ASO costs to Self-Funded costs, and get you the best deal possible. (see Funding Arrangements)

Certain types of corporations have the demographics that make them excellent candidates for creative funding arrangements. Once we meet with you, and get an understanding of your business operations, your employees, your benefit goals, and obtain specific insurance data, we can advise you on which funding arrangement best fits your needs. We are very objective in our analysis, and recommendations.

Numbers always make more sense than words.

If you have an organization with 300 or more eligible full time employees, and you haven’t explored the availability of Creatively Funded medical and dental plans, then it’s time to take a hard look NOW!

If you already have a funding mechanism in place, then let Modern Concepts analyze your plan along with the results, and we will give you an honest opinion of where you stand and what you can do to improve your program. There is always a way to achieve lower costs, if you have the will to look for solutions.

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