But your traditional Blue Cross Blue Shield United care plan that you get from your employer is typically a fully insured plan. And, very few consumers or agents, I would argue, really understand these other types of plans, which would be what are called fully will we have fully funded, which are very traditional plans, then level funded and then even self-funded. Right. And these are mechanisms and plans, if I’m not mistaken, have been put in place, to help control costs. Right. So this is kind of more of a cost containment situation because everybody, every company out there is trying to spend as little money as possible. And so it’s just like anything else in life, less risk, less cost. Right. 100% or excuse me, I said that run less risk, more cost and the coins and insurance. Because if you want less risk within your plan, you’re going to pay a lot more for the fully insured plan to make sure you have that out of pocket maximum there, which I guess you have that anyways, right? But, cover a lot, a lot of upfront cost. So before we get going, please let us know. Who are you? Where are you from? Yeah. My name is Olivia. I’m originally from Wisconsin, live in Arizona now, and I am the Midmarket sales executive with Allstate Benefits out of our Phoenix office here. Everything we do is self-funded insurance group health plans, whether that’s level funded, traditional, self-funded, standalone stop loss And we really focus on finding cost containment strategies for groups like you were saying, for most companies out there, their health insurance and health care is the number two expense for the company after payroll. No kidding. Oh, yeah. But a lot of companies don’t look at that like anything else in their supply chain. When it comes to trying to find new efficiencies and trying to find ways to save money in ways to be strategic about it. Even though it’s a huge expense, companies aren’t looking at it like anything else that they would be sourcing for their business. So we try to provide different strategies for companies and give them the resources, give them options so that they can be as strategic about their healthcare as they are about anything else that they’re providing. That’s really interesting. I mean, just have you ever heard of why that is? People just don’t want to deal with it. It’s a dirty word called insurance. And everybody just wants to kind of put it up on a shelf and forget about it, I think. Take your medicine. Just pay the bill and walk. Yeah, I think one, objectively, it’s confusing for most people who have no idea about insurance. There’s a lot of big words that they have no idea what they mean. It’s a lot of contracts and a lot of fine print that people don’t want to read. Right. Again. And so when people think of insurance, you think of a traditional fully insured health plan. You pay your premiums to your carrier. And that’s just how it works for most people, especially, if it’s a, let’s say, small business who they don’t have a full HR team to be looking into all of the options, or a designated CFO who’s trying to find ways to cut costs. So especially for small businesses, you hear, this is what health insurance is. You buy this and then you get this coverage. Awesome that it’s not something you really take another look at. Just because a lot of people don’t know that you can take another look at it. There are alternative funding solutions on the market. Right. So that’s what we’re trying to do is kind of preach the good word about all the other alternative solutions. Sure. So fully insured really is the simplest way for the employer, but it’s also the most expensive. So it’s kind of a full service of all the insurance group insurance plans that are a good way to look at it. Yeah. So with fully insured, I would say that now it’s not necessarily always the most expensive, depending on the group and the health of the group, because it is underwritten based just on the census and the demographics of the people, whereas we’re underwriting based on expected claims from the group But there’s also no strategy there with fully insured and fully sure it’s just age band and correct. Yes. So there’s no strategy with it. You pay your premium. You have no idea where those dollars go. It’s all handled and taken care of, but there’s not transparency into the data of what those dollars are being spent on, how much you’re spending on claims, that kind of stuff. Whereas with a self-funded one, you have all of the data because it’s your money and your dollars, and also you have you are the one who is putting down the money. That could come back to you at the end of the year on a level funded program. That’s the claims fund where you’re funding it. But any dollars left over are coming back to you at the end of the plan year. Traditional, self-funded. You’re paying claims as they’re incurred if you’re going to spend less than expected, which we hope groups do 4 to 5 years, groups perform better than expected. You’re reaping the margin instead of the fully insured carrier. So yes, a lot of times it is cheaper, but it’s even more about the why, the strategy behind why you’re doing it, keeping your dollars in your pocket. As opposed to putting them in someone else’s pocket. Gotcha. So let’s let’s jump in a little bit directly into the self-funded because the level fund, in my understanding, is kind of like the middleman between fully insured and self-funded. Right. So, I think I just heard you say that on the self-funded plan that, let’s just say I was the business owner. I had 50 employees. Basically I’m saying, hey, employee, I’m going to personally insure you. If you go to the doctor, you have an A claim or one of these. I’m going to take on that burden upfront. Whereas typically we would build the insurance company. Is that accurate. So to the employees it doesn’t look any different. But but from the employer.But from the employer’s perspective, yes. It’s essentially that you are paying up to a certain limit for an employee’s claims. And then your stop loss premium that you’re paying is where in this case, Allstate would take over from there. And so and so in essence, it’s more or less it’s just a higher deductible plan. Is that an easier way to look at it. Yeah. So for the pays that deductible I mean exactly. And so how these plans work is there’s what we call an aggregate deductible and a specific deductible. So the specific deductible is the most that you’ll spend on any one member. So if one set that’s something that the employer can choose what they want to set that deduction. What’s the lowest number their employer can choose? I think they can choose. It depends on factors of what the group wants. I think it can go down to 10 or 20. It can also be 4050 or 100,000. But the employer can choose what they want to be, their specific deductible for any one member to hit. And then there’s an aggregate deductible for the max that they would have to spend on the group as a whole. Oh good. Okay. So there’s, there’s a I didn’t realize that. Yes. That makes a lot of sense. So we our underwriters estimate, I think it’s 125% of expected claims is what their aggregate deductibles going to be. So they would never have to spend any more than that So the employer goes into the plan. You’re knowing exactly what the maximum amount they would have to spend is. A worst case scenario. Worst case scenario. But obviously most cases, we hope that it would come in a lot lower than that. And then they’re keeping that money in their hands until they need to spend it. They know I can budget for maybe having to spend this much, but it’s not like I’m going to be on the hook for more than that when I went out. So that being said, I would think that it’s going to make it’s almost a no brainer for any company. If they’re fully insured, plan is going to automatically hit that max that they’d hit anyways. Well, why not roll the dice a little bit and potentially save that $50,000 that you ordinarily would have just paid out in an insurance premium? Exactly. That’s kind of the mindset. Exactly. Yes. Right, right. So it’s it is. I could see where this makes sense only for really larger ones, for larger groups. So what is the minimum number. For a that were Allstate in this case would consider for a self-funded plan. So the number of traditional self-funded, for it to get sent over to our underwriters that way 101 hundred lives, if we have claims data, if they were already on a level funded plan before, they’re not coming from fully insured And we have all of the data about how their plan is running. We can look at it for groups that are smaller. But again, most groups in that size range don’t really want to go that route unless we have all their claims data from being on a level funded plan. And they know that they run really well. But generally if we’re looking at it’s going to be in the 100 plus space, could someone actually could me because we have a fully funded plan for our business. Can I call UnitedHealthCare and say, hey, I’d like to see my expenses break out. Is that something I can actually ask for? They are very, very stingy with the data that they’ll give even to the consumer. Yes. So as a group, there’s very, very limited data that you can get about how your plan is running all of that kind of stuff. And that’s a big benefit of self-funding too, if you can’t make great decisions for your business if you don’t have the data to back it up. So we give as much data as possible to the groups. Obviously abiding by HIPAA regulations and things like that, but as much data as possible about what providers people are seeing, how much we’re spending on claims, what drugs people are getting, that kind of thing, so that groups can then use that data to be strategic about the decisions they’re making. Obviously, we hope that that means staying with us year after year, but we want them to have the information that they can so that they can go out to market and know exactly what’s going on in their group, to then make a good decision for their business. So it sounds like level funding is that kind of, that bridge for people. Are grants fully funded to self-funded? Yes. A lot of times it ends up being the stepping stone on the way to a traditional. So let’s give it a shot. Yeah, but still a level monthly payment you can budget for. You know what it’s going to look like And basically it’s just paying for the claims upfront by funding a claims fund to pay them as opposed to paying them as they’re incurred. So does the does the business owner incur a lot more paperwork in this? I mean, is there a lot more for compliance purposes? I would think that there’d be do you have to use a TPA or anything or who’s whose are you guys, the TPA who’s who’s tracking this information. Yeah. So Allstate is the plan manager and the stop loss carrier. We have a couple different TPA that we can use generally on pretty much all of our bundled solutions. Bundle being the original self-funding or level funding. We use allied benefits as our TPA. In certain parts of the country, we can also use marketing, but I think Allied is the TPA on 95% of the groups that we have. So we’re fully integrated with them. And that takes that admin, that pain, that heavy lifting away from the group and puts it into the hands of the TPA. And also the legal liability. Yes. Exactly. Right. I mean, it’s it’s real legal liability for large companies. You got to pay attention. Okay. All right. So it’s so it sounds like it’s kind of, a little trickier to set up maybe up front by comparison to a fully funded plan. But it sounds like once everything’s set up and you have your TPA, which obviously you have to pay for, there’s an additional cost and that’s baked in. So when I baked in, yeah, when we’re looking at a quote that we would send over to you guys, well funded, it’s split into three line items admin costs, which is that TPA costs the stop loss premium and the claims funding traditional self-funding.It would just be the stop loss premium and the admin costs. You wouldn’t be funding a claims account because you’re paying it as they come in. And then we can also just sell the stop loss coverage. If a group wants to go find their own TPA and find their own PBM pharmacy benefit, would they want that? Just they’re so big.Yeah, it’s generally really big groups that are wanting to kind of have a department they really, really specialize in. Yeah. Exactly. Analysts and all that. Exactly. So generally you don’t see that until you’re in a couple hundreds, thousands, that kind of thing. But it’s an option as well. So you kind of get as bundled or as unbundled as you would want to be.So, you know, industry wide, what kind of what percentage savings, dollar savings would you say on average, that groups are seeing large groups you’re seeing by considering a level or self-funded plan? Do you have that idea? Any ideas? Have you heard, is that like a 20% savings or is it like a ten? It really, really tells me it’s in the group. I sometimes it can be, I don’t even want to throw out a number just because it really depends on the group and what kind of coverage they have and what kind of coverage they’re looking for, what kind of network they’re choosing, if they want to go for full network reference based pricing, where they are in the country is a big thing.So it’s very, very dependent on what the group is looking for. But again, yes, they generally do save a significant amount of money, but even more than the dollar savings, it’s a lot of time strategy play. Sure, sure. So it is kind of for those business owners who really like to, you know, manipulate the numbers. And you know, save dollars. It’s not for the guy who’s looking for the quick and easy. Yeah. For sure. Okay. So let’s get back to some more specific questions about self-funding again. Okay. So let’s just roll with, I’ve chosen the 20, I’m the business owner and I have my 50 employees. And we’ll just say, it sounds like there’s options where I can say, I’m going to take care of the first 10,000 clear up through the first $100,000 worth of my employees bills. Correct. So you’re my employee, right? You go to the doctor, you find out. Oh, it’s good news. You’re going to have a baby. And I’ve a, let’s say, a $20,000 deductible plan. And let’s say I’m with, an and, signature PPO network. Right. I chose a really strong network, and I think that’s what to see.Signature administrators. Yeah. Okay. Yeah. Yeah. Which is a super strong nationwide network. Right. So me, the employer, okay. So you the employee, you go to your doctor and you’re in your prenatal pass, right? And so you’re going to the bills are going to be incurred, but they’re going to typically they’re submitted to are they still submitted to the to Aetna for a network repricing.And then that’s what I pay the doctor. Then at what point do I pay the doctor as the employer. So the employer is not paying the doctor at all. Allied benefits the TPA would be paying on your behalf. So you don’t even really need to do anything other than putting money into the claims fund. On a traditional self-funded plan, you get billed, put money into a bank account that then Allied pays to the provider.So it’s not the business owners responsibility to be directly paying any providers or anything like that. That’s kind of where the TPA comes in. Gotcha. Receives the claims, sends you a bill, pays the claims. So as the employer do I even know that it was Olivia who created these claims? It just comes across you. Oh this. Yes. Okay. Great. For HIPAA purposes. Yeah. So you’re privacy. That makes sense okay. And I mean if I was pregnant and you get a pregnancy claim come in, you’d probably know, right? But I’m not here. There. No. It’s all decentralized to the person. And what exactly is going on in the situation. But when you get aggregated data at the end of the year, you see, what providers are billing us, what amount of money.So when we start these plans, is it something that the employer, from a cash flow perspective, automatically has to put in a starting fund, like 10,020 thousand hundred thousand? Do they start with funding this account? With that claims account, you’re referring to it or is it starting bone dry and then pay as you go. So if you’re looking at a traditional self-funded model, it’s pay as you go.Pay as they’re incurred on a level funded plan. You are. So if there is an expected 125% of claims that split up over 12 months, so you’re basically funding it at what is expected over the year in that situation, let’s say January, you get a major claim month one and there’s not enough money in that claims account. I’ll state will advance the amount of money and then it’ll just get paid out over the next couple of months as you continue to fund that claims account.So it’s not like you would be on the line for more because there’s not enough dollars in that account right now. And then that’s where fully I mean, that’s first level funded. Yes, exactly. The traditional model it is, just a self-funded model. Traditional self-funded model. Yeah. Okay. I want to make sure I don’t keep it clear in my own head.Yeah. So is the traditional self-funded model. It’s paying as the claims are incurred up to those limits. Your specific limit, the max. You’ll pay one person and the aggregate limit the max you’ll pay for the entire group. Okay. So you could potentially see if there was a massive couple of people had a couple massive claims. You could potentially from a cash flow perspective need to pay that full aggregate amount upfront within a couple months. Yeah. So that’s kind of the risk to these plans that the company needs to really be aware of that you could potentially have to stroke a large check, right? Yes. An A level funding or fully funded situation. It’s more controlled cash. Yes. And that’s why generally groups that are larger have more cash, liquid. That would be going the traditional self-funded route. Because if they get a big claim month one, they can afford to pay it. And that also means that they wouldn’t be paying them after that point in the year. But knowing this is the max amount I’m going to spend in this plan year. Whereas for a group that maybe doesn’t have that cash liquid and couldn’t incur a big claim month one because obviously you hope no big claims happen at all, but you can’t really control when those come in.Level fund would be a better fit because, you know, you’re paying a certain amount each month. So is that part of the underwriting process for that you guys go through from a if you may, as the employer, you’re going to take a look into my financials in order to make sure that I can, it’s sustainable for me to make sure I have the liquidity to be able to stroke that big check in case something the largest incurred on a self-funded is is there a financial underwriting for the self-funded plans for the employer? I would have to look into that for you just because I’m not sure what the financial background is on that side. That may be more of a broker. Broker to group conversation, talking to the group, making sure that they’re aware of the maximum they could spend. Do they have that amount available, that kind of thing?Because if you had the credit line out there, it wouldn’t really matter. You should make sure you have that. You have something available. I think the business owner would need to be prepared. Yeah, exactly. I mean, part of being in business is don’t run out of cash 100%, right? I mean, that’s such a big deal. So if you got nailed with something you weren’t expecting, get nailed right up front, that can really be devastating. Yeah. And so that’s the biggest thing with any of our plans. Having runs costly is education, making sure the employer knows exactly how the plan works. The group members know exactly how their network works, or if they’re on a reference based pricing plan, how the reference based pricing works. Because when everyone knows exactly how it works, it works. Awesome. But that all comes down to education of making sure that the key players involved are aware of what they’re signing up for, what their potential liability could be, and knowing, okay, up to this amount, we’re responsible after this all state stepping in and taking over from there. Well, good thing we’re going to be creating a lot of educational content to teach people because this is a little nuts to a little different.I, you know, from our experience of being an insurance broker for 13 years, you know, people are absolutely clueless about insurance. They buy out of fear, not knowledge. If they bought out of knowledge, they would buy self-funded plans. They would take on these high deductibles, save the cash. Speaking from my own personal experience, I, you know, owned bars and restaurants.Before I had a young family of four or healthy. I paid UnitedHealthCare, I think $1,200 a month. For a plan that we never used once. My uncle was a doctor across the street. I really only needed to have a high deductible emergency catastrophic plan because I didn’t need copays. You know, I didn’t, I just wasn’t on medication, so.I mean, I could have afforded to take on a lot more risk because there was very minimal risk. And because I didn’t have anybody to teach me where the true risk lies, I made a foolish mistake. $64,000. Just UnitedHealthCare took it, and I don’t think we had a claim 101 so it’s life’s lessons. So it’s tricky out there for these business owners. I get it 100%. So I look forward to making some more content with you and, and figuring out what is a true educational path. It’s needed to help people understand what they’re missing out on. Thanks so much for coming in today. Thanks for having me. And to do more of these and, and deep diving. Yeah. Me too. So thank you so much. Thank you. All right, that’s a wrap.