Below are some of the most common questions about the group self-funded Funding Advantage health plan. If you are unable to locate your question on this list, please contact Sales Support.
Underwriting & Enrollment
Is Funding Advantage Guarantee Issue?
No, self-funded plans are not subject to guarantee issue/no medical underwriting requirements.
Is There an Adjustment in Rates if There is a Change in the Group's Enrollment During the Plan Year?
Yes, if there is more than a 15% change in enrollment, there will be an adjustment to the contribution to the claims fund and stop-loss premiums. Funding Advantage is a maximum funded plan so change in enrollment can impact the claims fund and stop-loss premium costs and overall potential claim refunds.
How Much Leniency Will You Allow When Underwriting a Group with Health Risks?
We try to project the future known claims costs of the group based on their current medical conditions. The goal is to rate the group appropriately based on their known conditions while reserving a certain portion of their costs for the unknown conditions for which insurance is purchased. We want each employer entering into the plan to be rated so that they have a high probability of realizing savings from their claim fund at the end of the plan year.
How Can We Pre-screen a Group if Their Health History May be a Concern?
The most thorough way to prescreen a group is to have them complete Allied medical enrollment forms. We recognize that isn't always possible, so provide as much medical information on the individual groups as you have. Other carrier applications or prescreen questionnairesare a reasonable starting point, but not always thorough. If you're concerned about a specific condition making the case a decline, talk to sales and we can help you work with our Underwriting Department to review a group for eligibility.
How Small of a Group Do You Allow?
The smallest group size we will accept for Funding Advantage is two. As small groups are thrown into the new ACA regulated market, self-funding makes more and more financial sense for even the smallest employer.
What Kind of Health Risks Will Disqualify a Group from Funding Advantage?
A group that has any major current condition such as cancer, pending major surgery or current major hospitalization will not be a good candidate for self-funding. Please refer to the guide to self-funding for information about which groups will benefit from Funding Advantage. Allied understands that there is no "perfect health" group. The best thing to do would be to send in a quote request with as much medical information as possible to email@example.com to see if your group would benefit from Funding Advantage.
How Would You Handle a "Shock Claim" at Renewal?
Past claims experience is not a significant factor in determining a renewal. We try to project the future known claims costs of the group based on their current medical conditions. If a "shock claim" is over, it isn't relevant to the renewal. The goal is to rate the group appropriately, based on their known conditions while reserving a certain portion of their costs for the unknown conditions for which insurance is purchased. We want each employer to be rated so that they have a high probability of realizing savings from their claim fund at the end of the new/next plan year. Large ongoing conditions for groups of 50+ may be subject to lasering to make their renewal more affordable.
Will Funding Advantage Give Credit for a Prior Plan Deductible?
Yes, credit is given for deductibles satisfied during the current calendar year.
Are the Benefit Deductibles Based on the Plan Year or the Calendar Year?
The employee benefits are calendar year based. The stop-loss coverage is plan year based.
Does the Specific Deductible Include Prescriptions?
Yes, the specific (and aggregate) deductible includes all expenses incurred for an individual employee during the plan year.
Since This is an ERISA Plan, are State-mandated Benefits Covered?
No. State mandates are not covered. However, we have reviewed all state-mandated benefits and removed items that are not commonly desired by the employer and their employees. Many mandates are considered to be part of basic coverage and have been left in the plan.
Are Both the Specific and Aggregate Coverages Incurred in 12 Months and Paid in 21 Months? Or is it Only the Aggregate Coverage That has Run Out?
Run out covers ALL claims incurred during the 12-month plan year whether those claims are paid by the claim fund (employer money), specific stop-loss or aggregate stop-loss coverage.
When is the Claim Refund Paid?
The claims refund is paid nine months after the plan year ends. For example, if a plan year starts in September, the claims refund will be paid in June the next year following the end of the run-out period on May 31.
Does the Employer Have to Make a Contribution to the Claims Fund When No Claims are Filed?
Funding Advantage is a maximum or level-funded plan. Each month the employer pays into the claim fund an amount equal to 1/12 of their maximum claims exposure. This provides the smaller employer with maximum safety so there are no claim calls for extra money to pays claims. It also eliminates credit risk as a factor during the underwriting process.
If the Employer has a Claim That is "Out of Contract", Will the Employer Need to Fund That Claim Out of Pocket?
Any "out of contract" or employer-directed claim payment will require the employer to write a check to their claim fund to cover the full cost of the payment for that claim.
If There is a Refund to the Employer from the Claims Fund, is There an Agent Chargeback?
Agent compensation is paid as a percentage of the total monthly costs paid by the employer. Even if the employer receives a refund from the claims fund, there is NO agent chargeback to compensation.
What is the State Availability for Funding Advantage?
Default compensation is determined by product and group size at time of quoting. Review the current Compensation Schedule for these defaults. A broker can request any level of compensation that will be reflected on the final rates issued to the group.
Is There a Maximum Number of Employees That can be Covered Under Funding Advantage?
Funding Advantage is available for any size group. Keep in mind that small groups (<100) will be completing medical enrollment forms and subject to underwriting. Larger groups over 100 lives may submit 2 to 3 years of past claims experience to determine rates and plan acceptance.