Transcript How Self-funding Works - Mutual Assurance Administrators

How Self-funding
Works
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Fully Insured
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Partial Self-funding
Administration
100%
Non-refundable
Premium
Stop Loss
Premiums
Potential
Claims
(Opportunity
to Save)
Claims treated as expenses
 Potential for savings
 Most premium taxes avoided
 Avoid certain coverage levels
 We manage self-funding
 Specific stop loss
 Aggregate stop loss
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Stop Loss limits your liability
Specific stop loss limit = $40,000
Individual catastrophic claims = $50,000
Amount paid by insurer = $10,000
Stop Loss limits your liability
$400,000 x 125% = $500,000
$500,000 = Attachment Point
Maximum funding recommended

Fully Insured
100%
Non-refundable
Premium
Maximum Cost = Total of
all premiums paid
Maximum funding recommended

Partial Self-funding
Administration
Stop Loss
Premiums
Potential
Claims
(Opportunity
to Save)
Administrative Expenses
Stop Loss Premiums
Maximum Claims
Example
Covered Employees: 65
100%
Non-refundable
Premium =
$450,000
Annual Premiums:
$450,000
Administration =
$20,000
Monthly Payment:
$37,500
Stop Loss
Premiums =
$130,000
Claim Payments:
$170,000
Annual Premiums:
$450,000
Claim Payments:
-$170,000
Carrier Profit:
$280,000
Claim Reserve:
$60,000
Actual
Aggregate
Claims =
$170,000
Actual
Savings =
$130,000
Example
$ 20,000
Administration =
$20,000
100%
Non-refundable
Premium =
$450,000
Stop Loss
Premiums =
$130,000
Actual
Aggregate
Claims =
$170,000
Actual
Savings =
$130,000
+ $130,000
$150,000
$12,500 per month
Claims paid: $170,000
Savings: $130,000
In Summary
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Funds belong to your
company
Flexible plan design
Compare at no cost or
obligation
Accurate claim settlement
Greater financial control
Access plan information
24/7
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Decision making
Monthly management
reports
Plan for the future
Adapt to change
Meet employee needs