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FlexOption (a Self-Funded) Program

Overview
An increasing number of employers are looking for a better way to manage and control their healthcare costs given the requirements and prohibitive high costs under the Affordable Care Act. NetCare offers an alternative financial arrangement for group benefit plans available to employer groups of 100 employees or more.

NetCare’s FlexOption Plans allows more flexibility in the design of your company’s employee health care plan. Under FlexOption, you contract with NetCare to process your claims, manage claims costs and administer your plan benefits. With FlexOptions you gain greater control by actively participating in the design of your plan. You’ll have the advantage of containing health care costs by funding the expected claims and transferring the unexpected risk to a reinsurance carrier offered by NetCare.

How Does Self-Funding Work?

In a traditional insurance plan, you pay a premium to your health insurance carrier. In return, the carrier processes and pays claims according to your benefit plan. The carrier is solely responsible for all risk. By examining your employees’ past claims experience, demographics and plan design, we can estimate the expected claims for your group. We can then suggest how much you should set aside each month to cover expected claims and related costs. As claims are submitted, NetCare will process and pay them from your designated fund account.

NetCare’s administrative fees are calculated on a per member per month basis and are billed monthly. Actual claims and administrative costs will vary monthly and cash flow fluctuations may be limited by a Stop-Loss insurance arrangement.

With NetCare’s FlexOption Plans, your maximum costs for claims expenses is determined up front and guaranteed, subject to enrollment and benefit changes. If the actual expenses are less, you get the unused funds back.

If claims expenses exceed the amount expected, stop loss insurance covers the excess.

All plan administration functions and tasks including customer service, policy issuance, utilization review and enrollment requirements are managed and administered for you so you can focus on running your business. You simply pay your monthly premium which would include the stop loss reinsurance premium, plan administration fee and the monthly expected claims funding cost.

Stop-Loss Protection limits your risk

Most companies that self-fund limit their risk by purchasing Stop-Loss coverage. Stop-Loss insurance protects against claims that exceed a predetermined amount. There are generally two type of stop loss coverage, a Specific Stop Loss and an Aggregate Stop-Loss Coverage. NetCare currently only offers an individual or specific stop loss coverage through Reinsurance Group of America (RGA Reinsurance).

Specific Stop-Loss Coverage will begin paying once a member of your plan exceeds your predetermined Stop-Loss level. For example, if your individual Stop-Loss level is $25,000, NetCare will automatically calculate and credit any claim payments made in excess of $25,000 for an individual member.

Aggregate Stop-Loss Coverage will begin paying once the entire company’s claims exceed an annual predetermined level. Typically, an Aggregate Stop-Loss Attachment Point is set as a percentage of expected claims, i.e. 120% of expected claims. However, the Aggregate Stop Loss Coverage is currently not offered with NetCare.

Stop-Loss insurance premiums are billed monthly and will list each employee covered by your group insurance program.

Contact

Contact our Marketing Department at (671) 472-3610 should you be interested in looking at a self-funding alternative and reducing your health care costs through NetCare’s FlexOption Plans.


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