Happy Holidays from DBS!

For the Holidays We're buying you lunch at La Valencia Hotel!

We're Hiring!!!

Producer - Insurance Broker - Benefits - Group Health

Job Description
Based in Mission Valley San Diego, we are an Independent Insurance Broker that is looking for a top Insurance Sales Producer! We have great clients, carriers and a strong support staff to make you successful! If you are a seasoned health care broker with a proven track record, please read on!

We offer the most competitive commission structure in the industry.
What you need for this position:

- At least 5+ years of insurance sales experience

- Excellent reputation, and references from clients

- Production of new accounts

- Valid license and designations

- Book of business
What's in it for you:

- Marketing Support

- Dedicated Account Manager

- Generous commision structure
If you meet these qualifications please apply today!

Company Description
DBS is a full service employee benefit firm specializing in helping small and midsize employers identify and implement strategic programs for medical, dental, and vision plans. These plans range from traditional, HMO, PPO, HSA, & HRA plans to specialized self-funded EPO plans. We can help you find the right solution for your company.


With the escalating cost of group health care insurance coupled with the increasing competitiveness of stop-loss carriers it makes more sense now than ever for employers to seriously consider partially self-fundeing their employee benefit plans Our team of consultants can help you analyze, implement, and manage a self-funded program that makes financial sense for your company. Companies with as few as fifty enrolled employees can minimize insurance costs and exposure by renting a prefered network provider and purchasing stop-loss insurace. For more information on self-funding visit our website www.discoverybenefitsolutions.com

Health Care Reform Cheat Sheet

Know the Answer to these 3 Questions!

By Andrew Oram

There seems to be quite a bit of misinformation about what is really going to happen for business owners come 2014.  Knowing the answer to these three questions should create as a huge relief to HR departments, executives, and business owners.

1.  Will I need to offer health care to all of my employees? 

2.  Is the health coverage I have in place, “adequate & affordable,”?

3.  Will I need to pay a fine? 

There are many unknowns about what the actual cost of healthcare reform will be, but without going too deep into PPACA (Patient Protection and Affordable Care Act) lets peal back the onion and address these basic questions head on. 

Do I need to offer healthcare to all of my employees?

If your company has fewer than fifty employees as of 2014 you do not need to offer coverage or make changes to your existing plan.

If your company has fifty or more employees you may or may not need to make any changes.  Without getting into the formulas for calculating how many full time employees your company actually has. Lets address whether your current plan is deemed, “adequate & affordable,” under the new PPACA law.  If you can answer yes to both than you probably don't need to make any changes to your plan.

Is your plan adequate?

Does your plan cover at least 60% of your employee’s medical expenses?  Most basic plans offered by employers cover 80/20 medical.  . This of course means the employee is responsible for 20% of incurred medical expense and the insurance company picks up the remaining 80%.  Most of us have deductibles, co-pays, and out of pocket maxes for hospitalization that fall well below this threshold.  If your plan only covers 60% of your employee’s expenses you’re still compliant according to the new law.  If you don’t fall into this category, or are not sure, you should probably talk to you insurance broker or adviser and find out.

            Is your plan affordable?

Retailer & manufacturers who employ a relatively high percentage of full time minimum wage workers who do not currently participate on their company plan may be panicking wondering how they are going to afford to stay in business.  Currently the new law states that companies that fail to offer an affordable health care plan to their employees will be assessed a  $2,000 penalty per employee.  But before you throw your hands up and close shop take this into consideration; affordable means that your plan cannot cost your employee more than 9.5% of his/her annual income.  Okay, that’s great, but what does that really mean when you work at a company with a thousand employees?  Do you need to calculate how much 9.5% of each employee’s salary is?  No.  What you need to do is offer a plan that is affordable to your lowest wage earner.  If it is affordable to that person it will be affordable to everyone else in your company.

Let’s work backwards on this.  The minimum wage for a worker in California is $8.00.  To be considered full time an employee must work 30 hours per week week.  Over a 52 week period assuming that this employee works 30 hours every week of the year he makes $12,480.  9.5% of his salary is $1,185.60 or $98.80 per month.  If your company plan costs your employees less than $1,185.60 per year or $98.80 per month you are in compliance. 

What if my employees pay more than that for coverage?

First, consider that this model is based on a minimum wage earner at 30 hours per year.  To make this applicable to your company take the lowest wage full time employee at your company and multiply his/her salary by 9.5%.  Divide that number by 12 months and you’ll have your magic number.  An employee working 40 hours per week at $12 per hour for 50 weeks a year makes $24,000 per year.  9.5% of his/her salary is $2,280.  In this example in order for this health plan to be “affordable” the employee cannot be asked to contribute more than $2,280 per year or $190 per month.

  

What are my options if my company is still not compliant?  

1. Seek out a more affordable healthcare plan where employee contributions are lower.
2. Consider raising your employer contribution.  You may be able to raise the employer contribution a couple of percentage points in order to make it affordable to all employees.
3. Offer a more affordable option side by side with your current plan

With more employees enrolling on my plan won't my overall plan costs go up?  

It has probably occurred to you that even if your company is compliant adding additional employees to your company plan may not be financially feasible.  You may have to consider offering fewer benefits, raising co-pays or increasing deductibles.  Before you do this you should probably discuss with your benefit adviser the likelihood that healthcare reform will make an impact on your plan and what that financial impact could be.

Just food for thought but consider this, if your low wage employees are not enrolling on your current plan now do you think they will enroll next year when faced with a $95 per year tax penalty?  If  the alternative is to pay $190 per month (as in the example above) the likelihood seems pretty low.  If your plan is already adequate and affordable you have done all that you need to do in order to be compliant under the new law.  Remember, to be in compliance your plan must be "adequate & affordable," as outlined by PPACA.  It is your employees' choice whether they decide to enroll or not.

For more information on this topic and other health care related issues join us at our next lunch & learn.  Information at: 

http://discoverybenefitsolutions.com/?page_id=673

Should Your Company Self-Fund Your Employee Benefits?

As insurance premiums skyrocket and uncertainty surrounds the health care reform bill, small and mid-sized companies are increasingly looking to contain a spiraling employee health bill. To do so, more are choosing to pay for individual employee health claims out of pocket—known as "self-funding"—instead of a monthly fixed premium to a health insurance carrier.
"Savings can be in the range of 10 to 20 percent," says Joseph Berardo, Jr., CEO of MagnaCare, which administers self-funded health insurance plans along with other plans to both businesses and municipalities in New York and New Jersey.
In deciding whether or not to self-fund, the potential for a lower monthly health care bill is weighed against the financial risk of covering employee health care costs—and the possibility of getting hit by a catastrophic bill if an employee gets in an accident or comes down with an illness. Sometimes employers weigh the demographics of their employee base—young and healthy versus aging and out-of-shape, for instance.

Dig Deeper: One Entrepreneur Chose Self-Funding and His Health Insurance Costs Dropped 20 Percent

While more than 93 percent of covered workers in firms with at least 5,000 workers are in self-funded plans, according to a 2010 Kaiser Family Foundation survey, the practice is not as common among smaller companies because of the potential to get hit by that huge bill—and not have the cash flow to cover costs. That said, only 16 percent of covered workers in small firms (with three to 199 workers) are in self-funded plans, Kaiser says, but that figure is up one percent since 2009.

Industry analysts expect more interest from small companies seeking to keep health care costs in line. A 2010 survey by Aon Corp.'s Aon Hewitt consulting unit found that seven percent of businesses with 500 or fewer employees plan to switch from being insured to self-insured in 2011.

In addition to MagnaCare, several big players offer to service self-funded health plans for smaller companies including Cigna, which targeted the market in 2008 when it acquired Great-West Healthcare, as well as WellPoint, UnitedHealth Group, Aetna, and Humana.

The Pros of Self-Funding Employee Health Care Costs
1. Customized Plans

You decide what the plan will cover including employee eligibility, covered benefits and exclusions, employee cost-sharing, policy limits and retiree benefits rather than buy into a one size fits all insurance policy. In addition, exemptions from state mandates means you decide what you want to cover or not cover regardless of state rules.

2. Better Data

You have more access to your employee health claims data and demographic information. Your exposure is limited to your own employees, not a broader population and risk pool (as may be the the case with a typical health insurance plan).

3. Cash Flow Control

You can manage your health care payments more effectively. First off, coverage is not pre-paid so you have access to cash and interest income not available under a standard insurance policy. A plan can also delay payment of recurring health plan costs until the services have been rendered. And if claims are lower than expected, you retain the savings, not the insurer. In addition, self-funded companies are not subject to state health insurance premium taxes, which may total two to three percent of the premium's dollar value.

4. Federal ERISA Laws Apply, Not State Regulations

The ERISA (Employee Retirement Income Security Act of 1974) law exempts self-funded plans from state rules including insurance laws, reserve requirements, mandated benefits, premium taxes, and consumer protection regulations. However, you do have to follow the U.S. tax code and federal anti-discrimination laws such as the Americans with Disabilities Act (ADA), the Mental Health Parity Act, the Health Insurance Portability and Accountability Act, the Pregnancy Discrimination Act, the Newborn's and Mothers' Health Protection Act and the Women's Health and Cancer Rights Act. 

5. Lower Premiums for Your Employees

Workers in firms that are self-funded have lower single and family premiums than workers in firms that have insured benefits, according to the Employer Health Benefits 2010 Annual Survey by the Kaiser Family Foundation. Plus, workers with family coverage in firms that are partially or completely self-funded pay less out of pocket than at those firms that are fully insured.

6. Potential for Lower Costs

The Self-Insurance Institute of America estimates plan savings of an estimated three to five percent each year because of improved claims management.

The Cons of Self-Funding Employee Health Care Costs

1. Financial Risk

With fewer employees (than a big company) to spread over the likelihood of accident or illness, you have a higher risk of costly claims. Most self-insured employers purchase so-called stop-loss insurance so they can get reimbursed for claims above a specified dollar level. (The Self-Insurance Institute of America describes stop-loss as resembling catastrophic coverage that indemnifies a plan sponsor from abnormal claim frequency or severity. Big companies like Zurich, Arch Insurance and Gerber Life provide this.)

2. Administrative Cost

You can either administer the self-insured claims in-house, or subcontract to a third party administrator (TPA). TPAs can also help employers set up their self-insured group health plans and coordinate stop-loss insurance coverage, provider network contracts and utilization review services—but that's an added cost.

3. Administrative Risk

The U.S. Department of Labor has interpreted the failure of self-funded employers to implement an efficient administrative system as a breach of fiduciary duty if you don't administer a plan right. You the employer are legally responsible for operating the plan. You also have to follow strict rules regarding private claims information since you will now have access to information not previously available; This information must be kept secure and may require a privacy officer.

4. Recession/Weak Economic Cycle

You may have to stay with a self-funded plan for at least three to five years to reap benefits. This can be more difficult in an economic downturn.
(Tatiana Serafin)

Answer to What is Self-Insurance?

Question: Business Insurance - What is Self-Insurance?


Businesses face constantly rising business insurance premiums. Health care premiums alone have doubled since 2008 according to some statistics. Since the attacks of 9/11, and seasons of unprecedented hurricane and storm activity, insurers have raised business insurance premiums while reducing available coverages.

One option for a business is to participate in a self-insurance program or insure its own risk. Here we answer some basic questions about self-insurance as a part of a business insurance plan.

Answer:

Self-insurance is a way for a business to lower ongoing premium expenditures and to take control of low-level risks within the organization. This is achieved by the business becoming its own insurer. This can be for a certain level of risk or a certain type of risk. The business creates a fund of money and manages the fund and any claims asserted.

For example, a car dealership with a service center may identify that the largest risk it faces working on a customer's car is a complete destruction of that car. The dealership looks into liability insurance for such a risk and finds the premiums too high or the limits to be too high for the risk. The dealership concludes that $50,000 would be the amount of one catastrophic claim if one of the mechanics makes a major mistake. It also concludes that the risk of this happening is very low. Rather than pay additional premiums for this coverage, the dealership creates a fund of $50,000, puts the money in the bank and earns interest. In the event the unthinkable happens and a Lexus is destroyed by a mechanic, the fund is there to cover the loss.

The above is an extremely simplistic example. Also, I am using a small business as a model and that is perhaps not a good example. This is because - regardless of online pitch hype or purported offshore schemes - self-insurance only makes sense, in most instances, for very large businesses and for very specific risks.
For example, in the state of Michigan, if you wanted to self-insure your automobile risk the state requires the business to own or operate 25 or more vehicles, possess a net worth of over $5 million, and sets a very high fund limit. In most instances, being self-insured is for large companies, with many employees, vehicles, locations, and net worth.
Some risks cannot be self-insured without being approved by your state. Workers' Compensation can be self-insured, but requires approval and the meeting of certain guidelines. Mandatory auto liability insurance can be self-insured only by meeting state requirements. Federal regulations allow the formation of risk retention groups under specific guidelines.
But, for enterprises that are large enough, self-insurance planning as part of an overall risk plan makes great sense. Why pay an insurer when you can pay yourself? Plus, in most instances the company is not insuring the entire risk. Instead it is self-insuring a portion of the risk.
Here is how:

• The business looks at each category of risk and determines what the maximum amount of any one loss that the business can sustain is - that amount is the self-insured retention (SIR) limit. The business retains this amount of risk and covers all losses under this threshold. For example, a company with a $1 million SIR, hit with a $870,000 claim would pay that claim out of SIR.

• But the fund must also absorb a number of smaller claims over time. The business (typically with the help of an expert or accountant) determines the maximum amount of the usual and expected accumulated losses within the self-insured retention in any given policy period. This is called the loss fund limit.

• Depending on accounting rules and application of tax laws to the business, funding this insurance fund and the insurance fund itself are listed as business liabilities for tax purposes. This can result in some tax benefits.

• The business might not fully fund these limits immediately, but may increase the fund over time. Similar to insurance premiums, except the business is paying itself. The fund would also reside in interest bearing accounts earning interest for the business.

• The business then purchases a specific excess policy. Any amount of a claim over the self-insured retention is paid under the specific excess policy. A specific excess policy, because it does not cover the amount of the SIR, is substantially cheaper than a traditional policy with first dollar coverage. Think of this in the same way that higher deductible policies are cheaper.

• If instead of one or two large claims hitting, the company experiences a high volume of smaller claims, the company guards against this with aggregate excess insurance. This insurance provides coverage above the loss fund limits and protects the insured from an abnormal frequency of losses. Again, because it is not first dollar coverage, the policy is substantially cheaper than a traditional policy.

• The business will also manage the claims that occur within the SIR. Under a traditional policy, claims are "turned over" to the insurance company, but under a self-insured plan, the business handles the claims either internally or through a third-party administrator.

Self-insurance can lead to significant savings. Also, you as the business owner maintain the right to fight or deny smaller claims that your insurer would simply pay without consultation. The business can control what legal team is used in the event of a law suit. And their are other benefits, but those would need to be explored with your insurance professional. Most large commercial insurers off self-insured plans and offer services to help administer those plans. For example, The Hartford has information online regarding its self-insured plans for business.

(source:about.com)

Self-Funding Actually Popular Among Small Groups

Self-insurance has historically been relegated to larger groups. However, Self-insurance is used frequently by smaller groups in order to get a handle of their health care cost increases. In light of the changes coming in the next 12 months - the Highmark/UPMC battle, health care reform, exchanges, individual mandates - self-funding is one of the few options that will allow you to maintain much of what you are accustomed to in regards to managing your health plan. You need experts who understand taking a small group self-funded and work with the right partners. Use this article as a template for a conversation with your broker.

Is self-insuring right for my small business?

by Bruce GrimmSmaller employers have historically been hesitant to self-fund their health plans because they commonly perceive it as suitable only for large companies. Done right, self-funding an employee health benefit plan can be a smart long-term strategy.Is self-funding the right choice for a smaller business client? Brokers can reach an answer by understanding the options in the marketplace and knowing the questions to ask their clients.

1. Do you want to know how your claim dollars are being spent?

Self-funding offers a higher level of information transparency when it comes to health care utilization trends. Claim reports can help pinpoint exactly where health care dollars are being spent and the impact of any wellness programs. This information can be helpful when considering benefit changes, and it also helps identify the health and productivity programs that target the health needs of your employee population.

2. Do your plan design and funding options work together to help you manage costs and improve health?

A self-funded solution that includes strategies and programs to help reduce overall claims - such as health and wellness programs, disease management programs, consumer-driven health plans and care management for serious illnesses - can help in identifying population health risks, design programs to specific workforce’s needs, and realize claims savings quickly and directly. With the cost of medical treatment escalating, these strategies are vital to control costs.

3. Do you have employees in different states, yet need to have one consistent plan?

Most self-funded health plans are not subject to state-mandated benefits. This allows an employer to offer the same coverage to employees in different states. In addition, because state-mandated benefits are not required, an employer can tailor a plan design beyond what most fully insured carriers have available “off the shelf.” Also, self-funded health plans pay state taxes on stop-loss insurance premiums only, so premium taxes are lower.

4. How much in-house expertise and resources do you have to devote to benefits administration?

An integrated solution is a simpler option than many self-funded solutions that include a third-party administrator that processes the employer’s health plan claims, a separate insurance company that issues stop-loss insurance and even another entity that arranges for a network of health care professionals who participate in the plan. An integrated program is where a single entity handles the claims administration, offers the stop-loss insurance and provides a proprietary network of contracted health care professionals with whom they’ve negotiated discounts. This integrated model can help your clients avoid coverage gaps caused by inconsistent or conflicting provisions in the medical plan documents and the stop-loss insurance policy.

5. Can you track claim expenses to avoid rate surprises?

With a fully-insured health plan, it can be as close as 30 to 60 days prior to the effective date when the insurer delivers a renewal. A self-funded health plan allows the employer and the broker to see how the health plan is performing throughout the year. Armed with this information, it allows for better planning for potential pricing and benefit design changes.

6. What level of stop-loss are you comfortable with?

Stop-loss coverage is available at the individual level and aggregate level, and it’s perhaps the most important component of a smaller employer’s self-funded plan.

The cost of stop-loss insurance is a monthly premium. There are a variety of stop-loss thresholds from which to choose. Because individual stop-loss products can include various reimbursement cycles, it’s smart to look for individual stop-loss products that reimburse the plan immediately when a stop loss claim occurs. Otherwise, the employer is responsible for covering the full amount of any excess claims until they are reimbursed. Likewise, when reviewing aggregate stop-loss options, it is important to make sure the policy includes monthly accommodation that helps to protect the employers cash flow by ensuring claim liability is capped on a monthly and year-to-date basis.
The marketplace of services available to employers and brokers has been changing, and many smaller employers are giving the idea of self-funding a fresh look. Employers making sure to have brokers that are up-to-date on the options available for self funding, knowledgeable about carriers' products, have expertise and experience, and ready for conversations, will ensure success for the employer's plan.

 (source: eba.benefitnews.com)

We are Specialists in Self-Funded Benefits

Our Broker Mike Lutosky interviewed in Wall Street Journal's Smart Money for Self-Funding Strategies!
http://discoverybenefitsolutions.com/wp/wp-content/uploads/2012/05/DBS_Salessheet_Funding_Strategies.pdf …