Could Self-Funding be the Strategy For You?

From ChamberChoice and Smart Business Pittsburgh

Self-funding is not a new strategy. But while historically utilized for large employer groups, its availability for medium and small employers is new. And the concept is showing impressive results when it comes to giving employers greater input in health plan design and more control over rising medical benefit costs.

Smart Business spoke with Domenic Pascucci, consultant at JRG Advisors, about the benefits of a self-funded health plan.

Why is control of a health plan so important?

Employers need to focus on where their medical dollars are spent to accurately implement and assess a benefits strategy that stabilizes costs. Employers that cling to their fully insured plan must face the reality that they have no control. They wait until 60 to 90 days from their renewal, hoping for a favorable renewal offer, but they’re often slapped with an increase. And so, the last-minute scramble begins — they modify their plan design, switch insurance companies and shift costs to employees.

These methods are a temporary solution at best. They never serve as a long-term strategy to effectively or efficiently manage an employee benefits program. In a self-insured or self-funded health plan, the employer takes on direct financial responsibility for employees’ health care costs. Rather than being in a large, fully insured risk pool, the self-funding employer takes on the risk for its group.

Why do some employers hesitate to switch?

Self-funding has grown in popularity and proven to save money, but ‘taking on risk’ can be an uncertain and intimidating concept. Many employers are misinformed and hesitate to make the leap from fully insured plans. A Sun Life Financial study found that nearly 50 percent of employers were skeptical of self-funding because of the fear of financial risk and 40 percent were fearful of incurring catastrophic claims.

Most self-funded employers, however, purchase stop-loss insurance to cover catastrophic claims, which protects the employer and caps the financial risk exposure. Furthermore, self-insured health plans are exempt from most state insurance laws and mandates. Not having to pay regular premiums to an insurance company can produce substantial savings. An employer is only paying for claims that actually occur in the self-funded model.

How do employers know if their organization is a good candidate for a self-funded plan?

Self-funding is not the right fit for every employer. Some careful research and analysis should be conducted by an experienced consultant that specializes in this type of funding arrangement. Identifying an employer’s financial situation, risk tolerance, cash flow, historical performance of claims and coverage needs are all factors that will help an employer decide.

What do employers need to know about setting up a self-funded plan?

If employers are viable candidates, their broker should guide and educate them on making the transition. Once an employer is committed to a pre-determined strategy that meets the company’s needs and affordability, a financial model should be developed. It will help identify potential outcome scenarios that will not only reduce the employer’s concerns, but also reduce the risk of incurring a large financial pitfall from a costly claim. Various stop-loss deductibles and their impact should be modeled out.

Once the financial model is set up, the broker can examine plans and benefits to find those that best suit the needs of the employer and employees. This is also a good time to review the responsibilities for managing the cost and affordability of the self-funded plan. To make the transition as smooth as possible, the self-funded plan should be similar to the fully insured plan. Finally, employers need a clear understanding of a third party administrator’s role, the various levels of insurance, network availability and which networks are best suited for them.

What’s the takeaway for employers?

If your goal is to take control of your benefits program and rising costs, it’s worthwhile to examine if self-funding is a solution for you. Seek the guidance of an experienced insurance professional who can provide a detailed analysis of your liability — only then will you be informed and ready to decide whether this strategy is for you.

Members Check Out New Renovations at Rebranded Quality Inn Bloomsburg at September Business After Hours & Ribbon Cutting

Members had an opportunity to check out a near completely renovated hotel as the Quality Inn Bloomsburg hosted September’s Business After Hours following a ribbon cutting to celebrate the completion of the yearlong renovations. The owner, management and staff of the Quality Inn were all on hand for the ribbon cutting, and then were able to greet several members that came to the After Hours to enjoy some tasty food from next door neighbor Quaker Steak & Lube, along with beer, wine and other beverages over a late summer afternoon. The event, held on Sept. 19, was likely the last quieter day for the Quality Inn before the Bloomsburg Fair got underway, as the hotel will be a busy hub of activity for the final week of the month as one of the closest area hotels to the fairgrounds.

The event was held in the main lobby and breakfast area of the hotel, which was completely redone to give a fresh and modern new look. Attendees were also able to take a tour and see the new exercise room and the newly remodeled guest rooms, which now feature all new bathrooms, carpets, beds and wallpaper. The renovations helped enable to hotel to be rebranded as a Quality Inn, a step up in hotel classification from Econo Lodge, the previous Choice Hotels brand that the hotel was branded as prior to the renovations.

Business After Hours provide regular opportunities to build business relationships while learning about the services offered by other Chamber members. The next Business After Hours will be held at Geisinger Bloomsburg Hospital on Wednesday, Oct. 10, from 4:30-6:30 p.m. 

 

Congressman Barletta Touts Accomplishments, Priorities

Congressman Lou Barletta speaks to the Columbia Montour Chamber on Sept. 21.

Congressman Lou Barletta touted some of the numerous accomplishments from his near eight-year tenure representing the 11th congressional district and also looked ahead to some of the priorities remaining for the current Congress in the few remaining months until the new Congress is seating in January. The U.S. Rep. made his remarks to members of the Columbia Montour Chamber and Columbia Montour Visitors Bureau as part of an annual breakfast program, sponsored by PPL Electric Utilities, on Friday, Sept. 21 at the Greenly Center in Bloomsburg. This marked the final time that Barletta will address the Chamber in his current capacity at a U.S. Representative, which he has done each year since he was first elected to his current office in 2010, as he is running for a U.S. Senate seat this year. 

Barletta reminded attendees that the government has eliminated over 20 federal regulations for every new regulation under the Trump Administration, which has greatly reduced the regulatory burden on small businesses and business in general. This, along with last year’s Tax Cuts and Jobs Act, has helped stimulate the economy to record highs. The recent economic growth, which was 4.2% in the last quarter, has led to a demand for workers, and there are now currently more jobs available in the country than workers to fill them, which has led to a greater need for skilled job training, needs that several local organizations such as Chamber members Pennsylvania College of TechnologyColumbia Montour Area Vocational-Technical School and others are working to address. 

In light of the recent flooding locally, as well as Hurricane Florence, which devastated several areas on and near the North and South Carolina coasts with wind and flood damage, Barletta spoke about the need to be proactive in making improvements to structures to prevent or minimize the damage caused by natural disasters. For example, instead of just rebuilding old structures that are located in flood zones and have been damaged by floods one or numerous times, Congress has and should continue to provide grant funding for flood mitigation. A local example of this is the flood wall built to protect Autoneum and the former Windsor Foods facility, which was funded in part by a federal grant. Additional federal money will be spent in the coming years to help extend that flood wall for a large portion of the rest of Bloomsburg that is located in the flood plane. Barletta mentioned that each $1 spent to mitigate damage caused by natural disasters saves anywhere between $4-8 in disaster recovery funds. 

Tracie Witter, regional affairs director at PPL, speaks about PPL’s initiatives in the community.

School safety was also a topic, and Barletta relayed his disappointment that Congress has not acted on any legislation to give secondary schools any additional funding or guidelines to deal with school security after the school shooting in Parkland, Fla. earlier this year. He compared with how Congress reacted following the shooting at the Congressional baseball practice in the summer of 2017, which took nine days for Congress to pass legislation that addressed some of the security shortcomings that were identified as a result of that incident, with what Congress has yet to do following the Florida incident. Referencing the hashtag the he started, #kidsbeforecongress, he said that legislation must be passed giving states and local school districts the resources and knowledge that they need to provide better school security. It will not be a one-size-fits-all solution, as different schools will require different security protocols, but the federal government must provide resources that will protect schools in the same way as federal buildings and critical infrastructure.

Prior to Barletta’s remarks, Tracie Witter, regional affairs director at event sponsor PPL Electric Utilities, gave an update on some of the initiatives that PPL has contributed to via the PPL Foundation. It has contributed to several local nonprofits, including Camp Victory and others, and through its Foundation, aims to make the communities in which it operates and its employees live, better places. PPL has also given back more than $300 million to its customers as a result of the Tax Cuts and Jobs Act signed into law last December. 

State Officials Promote Education Saving Program

Joe Torsella, PA Treasurer (second from left), was recently joined by PA Senator John Gordner (far left), Rep. David Millard (second from right) and Tom Leary, President of Luzerne Community College (far right), at the McBride Memorial Library in Berwick to announce the statewide launch of the Keystone Scholars program beginning in 2019.

Beginning in 2019, every child born or adopted into Pennsylvania will have $100 invested into an account for their future education. Funds can used up to age 29 for continuing education after high school to better prepare for the workforce. Pennsylvania Treasurer Joe Torsella was joined by other state officials in Berwick recently to celebrate the statewide launch of the new program to encourage education saving.

The Keystone Scholars program was piloted in seven counties in 2018 and uses Pennsylvania Treasury account earnings and philanthropic contributions, no general fund tax revenues. The goal is to encourage families to set up and fund private 529 accounts for children. Contributions to 529 plans are tax deductible, and earnings are tax free when used for qualified educational expenses.

Treasurer Torsella was joined by PA Senator John Gordner, Representative David Millard, and others at the McBride Memorial Library in Berwick on Sept. 7 to promote the program. Torsella, a Berwick native, celebrated the creation of Keystone Scholars as a bi-partisan effort. Senator Gordner applauded Torsella’s commitment to the program, noting that his swearing in ceremony in early 2017 was held at a school. 

Average student debt among college graduates in Pennsylvania ranks worst in the nation, according to Torsella. Regularly funding a 529 plan can significantly reduce, or even eliminate, the need for student loans. Additionally, children with a 529 plan are three times more likely to pursue additional education after high school, resulting in higher earnings over a lifetime.

More information about the Keystone Scholars program and 529 plans is available at the PA 529 website

Member News – September 19, 2018

Member News

  • Knoebels Amusement Resort, which is no stranger to industry awards, is once again the recipient of several Amusement Today’s Golden Ticket Awards, which annually recognize the “best of the best” in the amusement industry and are calculated from an international poll (See the complete rankings for all categories). The results come from a survey that is sent to a database of experienced and well-traveled amusement park fans around the world asking the to rate the “bests” in 25 categories. This year, for the first time, it received the Golden Ticket for best wooden roller coaster for the Phoenix, while the Grand Carousel again received the Golden Ticket for best carousel, a distinction it has received every year the award has been presented, and Knoebels also placed first for best food. In addition to its trio of first place awards, it also ranked third for best overall park, third for best dark ride for the Haunted Mansion, third for best Halloween event for the popular Hallo-Fun Weekends in October, fourth for friendliest park and fifth for indoor coaster for the Black Diamond ride. 

 

  • The Borough of Danville’s Flood Resiliency Task Force will host a flood insurance policy seminar at the Danville Borough building, 463 Mill St., Danville, tomorrow, Sept. 20, at 6 p.m. Stetler Insurance Associates will present information regarding what should be included on the flood insurance policy declaration page, review common mistakes seen on flood insurance policies, and answer questions. The Flood Resiliency Task Force is made up of representatives from real estate, banking and insurance industries, as well as local residents and Borough staff. See the flyer for additional information, or contact Jamie Shrawder at 570-275-3091 ext. 3 or email

 

  • The Penn State World Campus will hold an online MBA sample class in which interested individuals can discover what it’s like to be a student in the Penn State Online MBA program on Thursday, Sept. 27 from 7-8 p.m. For a complete listing of upcoming PSU World Campus information events and news, check out its Sept. newsletter for alliance partners, through which all employees of Columbia Montour Chamber members, their spouses and dependents are eligible for a 5% discount on tuition through the Penn State World Campus. 

 

  • The Central Susquehanna Community Foundation‘s Women’s Giving Circle will hold its annual celebration on Thursday, Oct. 4 at the Pine Barn Inn from 6:30-8:30 p.m. This event, sponsored by First Keystone Community Bank, will celebrate another successful year for the Women’s Giving Circle, which was established to empower, connect and inspire women and girls by supporting initiatives and resources that better their lives. This event is open to the public and those individuals that may be interested in joining the Women’s Giving Circle. For more information, see the flyer, and RSVP by emailing or calling Karri Harter at 570-752-3930 ext. 6. 

 

  • The Central Susquehanna Community Foundation will hold a luncheon on Friday, Oct. 5, from 12-1:30 p.m. at the Iron Fork’s banquet room to celebrate the grants made to community organizations through the Danville Area Community Foundation. Local nonprofit organizations will be presented with the 2018 grant awards. There is no cost to attend, but an RSVP is requested. RSVP online or by emailing or calling Karri Harter at 570-752-3930 ext. 6. 

 

  • NEPIRC, DRIVE and SEDA-COG will team up to host a Lunch and Learn titled “Cybersecurity Trends & Safeguards for Manufacturers on Tuesday, Oct. 23,  from 11 a.m. – 1 p.m. at Monty’s on the Bloomsburg University campus. This free seminar is specifically intended for manufacturers and helping them respond to current threats and trends in the cybersecurity world. Topics covered will include ransomware, hacking, breaches and disasters, and safeguards will also be presented including best practices for prevention, mitigation and incident response. See the flyer for more information, and register online, by email, or call 570-704-0018. 

 

  • MePush will be hosting a series of study sessions throughout the fall at its conference room at 130 Buffalo Rd., Lewisburg, for information technology professionals that are taking and interested in getting together to study for the Cisco CCNA exam. This major certification in the IT industry is a big undertaking for some, so MePush would like to offer a forum to help other IT pros in the area improve their skills and certifications. If interested, please email Art so MePush can have a headcount.