Effective Delivery of Small Group
Level Funded Plans
11670s0117
Changing your perspective
Salesmanship
2
Changing your perspective
Leadership
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Delivering Small Group
Level Funded Plans
• The Value Proposition of Level
Funded Health Plans
• The Healthcare Adviser Role
• Value of your time
• Your Value Proposition
• Qualifying the prospect
The Value Proposition of Level-Funded
Health Plans is…
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Strategic compliant solutions
Cost reduction over time
Improved risk management
Flexible structure
More information
Better choices
Rewards for good behavior
Level Funded Plans
Greater Time Commitment?
Skills
Fully Insured Small Group
Plans
Level Funded Small Group
Plans
Benefit Plan Designs
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Marketplace Options – Carriers,
Networks
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Cost Comparisons
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Commissions
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Compliance HIPAA, ERISA, DOL
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Level Funding Structure
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Medical Underwriting
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Employee Engagement
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Regulatory Reporting
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Claims Analysis & Review
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Referenced Based Pricing
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Direct Primary Care
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Long Term Strategic Planning
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Fees for Service
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Time
40 Hours per account/Year
70 Hours per account/Year
Who is a Health Care Adviser?
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A trusted strategic partner
Professional equivalent of attorney or CPA
Management team member
Technical consultant
Resource for compliance
Resource for communications
HR leadership and planning support
Insurance market access point
What is your Value Proposition
as a health care adviser?
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Level Funded or Fully Insured?
Solutions or policies?
Professional or peddler?
Value or price?
Long term or short term?
Adviser or Agent?
Not a spread sheet sale!
What is your Economic Value as a
Health Care Adviser?
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Your technical competence
You understand employer’s business issues
You serve the right clients
Your robust systems, processes and support
Your strong communications skills
Your market access and knowledge
Your creative solutions
Your documented success stories
How do you quantify your Economic
Value as a Health Care Adviser
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Communicate the value of your time
Communicate the scope of your services
Communicate your reality
Document your scope of services
Disclose your fees
Quantify the ultimate cost saving over time
Operate with a formal agreement
Questions to qualify prospective
level funded employer.
Note: Make sure you are talking to the ultimate decision maker!!
1. Why do you provide employee benefits?
2. Do your employees understand the value of their current benefit plan?
3. In total, how much have you spent to provide employee benefits to
your employees over the last 5 years?
4. What do you expect your cost of benefits to be 5 years from now?
5. Are your current plans - ACA, ERISA, IRS, HIPAA and HHScompliant?
6. Are you prepared for a DOL Audit?
7. Has your current broker explained the implications of a DOL audit?
8. Would you be interested in a product that eliminates insurance
company profits and returns those profits to you?
9. Do you know the difference between a health insurance broker and a
health care adviser?
10. What do we need to do to earn the right to become your health care
adviser?
Have you prepared your clients for a
Department of Labor Audit ??
Sample DOL Audit Letter
Dear Employer,
This letter confirms my appointment with your company on (Month,
Day, Time) to review your employee benefit plans…….
The U.S. Department of Labor, Employee Benefits Security
Administration, has the authority under Section 504 of the Employee
Retirement Income Security Act of 1974 (ERISA) to conduct periodic
investigations of employee benefit plans to determine whether such
plans are conforming with the provisions of Title I of the Act or any
regulations or orders there under……….
“This review is an official investigation…………”
Sample Department of Labor
Audit
Partial list of required information
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All Cobra Notices for past 2 years
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List of all employees who had a qualifying COBRA event
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List of all terminated employees
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Summary Plan Description (SPD) of employee benefit plan
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All HIPAA Certificates
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List of denied claims
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WHCRA one-time initial notices
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All insurance contracts and billing statements
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Claim files, claim reports and any analytical data
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All documents pertaining to payment or denial of claims
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All benefits documents prepared by consultants, brokers,
actuaries
Level Funded Plans
Fee for Services Business
Model
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What is your time worth?
What is your skill worth?
What rate will your market support?
Can you communicate your value proposition?
Can you justify your value?
What is the Value of Your Time
as a Health Care Adviser?
Key questions:
1. If you had to charge an hourly rate to your
clients for all the services associated with
providing their ACA compliant group health
plan, how much would that rate need to be?
2. What is the current hourly rate we are actually receiving
from the commissions we earn on this account?
3. Is that hourly rate adequate to cover our costs and
compensate us appropriately?
Calculating your current “hourly
value” as a Healthcare Adviser
1. Total annual revenue
2. Total man hours worked by producer(s)
3. Divide revenues by man hours and multiply by 2*
*(assumes 50% of your hours are billable to a
specific client)
4. The result is an indication of what your billable
rate would be based on your current income
Sample Healthcare Adviser
“Hourly Value” Calculation
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Annual revenues = $300,000
Total producer(1) man hours – 2,200
$300,000 / 2,200 = 136
$136 x 2 = $272/hr.
This is an indication of what your billable rate
would be based on an annual income of
$300,000.
How many man hours can you
afford to spend on a case over
12 months that generates
$8,000 of annual income?
$8,000 / $272 = 29 hours
What would you need to charge
if this case required 50 hours of
your time in the next 12
months?
50 x $272 = $13,600
(If you worked 50 man hours on this case at the
current commission of $8,000 your billable rate would
be $200/hour which would be a 27% reduction in pay)
Comparable Professional Rates?
Hourly market rate for:
• Lawyers -- $250 to $1,500
• Accountants -- $150 to $600
• Engineers -- $350 to $600
• Architects -- $350 to $600
• Consultants -- $150 to $1,500
• Insurance Agents -- $50 to $600
Other Considerations
Specific Contract - Fee for services:
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Scope of services
Terms and conditions
Invoicing and collection
Fees and commissions
Errors and Omissions Insurance:
• Includes or excludes fee agreements ?
• Review specific exclusions
How Your New Value Proposition will
Grow Your Revenues and Profits
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Adopt a fee-for-services business model
Know and protect the value of your time
Institute time management tools
Document and analyze your operating costs
Discontinue low-revenue, low-margin business
Partner with competent resources
Level Funded Health Plans require a
consultative approach!
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Explain the concept and long term objectives
Obtain a commitment to the concept
Be realistic about time & resource requirements
Explain the mechanics
Quantify long term gains and savings
Set expectations realistically
Communicate continually
Thank you!