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The Dovetail Plan

The Dovetail Plan. Lowering Health Care Costs for Your Company!. Buzzwords in Low Cost Health Care. HSA Compatible Plans Significant plan restrictions Employee rarely funds his own benefits Employer at risk for his contributions if employee terminates.

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The Dovetail Plan

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  1. The Dovetail Plan Lowering Health CareCosts for Your Company! TPA Systems, Inc., Houston, Texas 713-641-4720

  2. Buzzwords in LowCost Health Care • HSA Compatible Plans • Significant plan restrictions • Employee rarely funds his own benefits • Employer at risk for his contributions if employee terminates TPA Systems, Inc., Houston, Texas 713-641-4720

  3. Health Reimbursement Arrangements (Accounts) • Employer owned and controlled • No strings attached to plan design • No federal contribution limits • Unused funds retained by the employer • A new concept – employers don’t know how to design plan or determine plan cost TPA Systems, Inc., Houston, Texas 713-641-4720

  4. Health Reimbursement Arrangements (Accounts) • A great new idea, the cost of which is very predictable! • Can dramatically lower employer health care costs when combined with a high-deductible health plan TPA Systems, Inc., Houston, Texas 713-641-4720

  5. Determining the EmployerCost of a HRA • 1. Employer chooses what expenses will be reimbursable • A. Deductible/Coinsurance Only: unreimbursed deductibles and coinsurance within a health plan (least expensive) • B. Deductible Plus: Unreimbursed deductibles, coinsurance, and co-pays (more expensive) • C. Freestyle 213: All expenses allowed under Section 213(d) of IRC (most expensive) TPA Systems, Inc., Houston, Texas 713-641-4720

  6. Determining the EmployerCost of a HRA • 2. Employer determines his Total Commitment • A. Identifies the total number of covered individuals in the plan • B. Establishes a dollar value that will be reimbursed for each • C. Multiplies the two together (e.g. 40 covered individuals X $2,500 dollar value = $100,000 Total Commitment) TPA Systems, Inc., Houston, Texas 713-641-4720

  7. Determining the EmployerCost of a HRA • 3. Employer attaches an appropriate funding percentage to the Total Commitment, based on what expenses he deems reimbursable • Deductible/Coinsurance Only: 20% • Deductible/Coinsurance Plus: 40% • Freestyle 213: 50% TPA Systems, Inc., Houston, Texas 713-641-4720

  8. Determining the EmployerCost of a HRA • 4. Employer calculates his annual funding objective (which he pays monthly) • A. Deductible/Coinsurance Only: 20% X $100,000 = $20,000 • B. Deductible/Coinsurance Plus: 40% X $100,000 = $40,000 • C. Freestyle 213: 50% X $100,000 = $50,000 TPA Systems, Inc., Houston, Texas 713-641-4720

  9. Putting HRA to Work TPA Systems, Inc., Houston, Texas 713-641-4720

  10. Putting HRA to Work TPA Systems, Inc., Houston, Texas 713-641-4720

  11. The TPA SystemsDovetail Plan Takes HRA to the next level • Contributing 1/12 of the annual funding objective binds the plan to fund all claims • Provides covered participants with ID cards • Removes the employer from reimbursing for claims • Claims advanced against uncollected funds! TPA Systems, Inc., Houston, Texas 713-641-4720

  12. The TPA SystemsDovetail Plan • Plan design facts • Up to three payout tiers available, including first dollar • Waiting periods need not coincide with group plan • Plan year can be any twelve month period • Plan can pay claims retroactively • Common ownership and affiliated service group rules apply TPA Systems, Inc., Houston, Texas 713-641-4720

  13. The TPA SystemsDovetail Plan • Claim Facts • Claims paid weekly • Claims can be paid via USPS or ACH • Claims must be accompanied by EOB from carrier • 90 day run-out upon either employee or plan termination TPA Systems, Inc., Houston, Texas 713-641-4720

  14. The TPA SystemsDovetail Plan • Funding Facts • Employers are 100% liable for all paid claims • Funding adjustments are made quarterly, but can be more frequent if necessary • Admin fees and claim funding are by ACH into different TPA Systems accounts (operating and claims) • Will bill direct for claim funding – deposit of 2% of Total Commitment required + 25.00 per month per bill TPA Systems, Inc., Houston, Texas 713-641-4720

  15. The TPA SystemsDovetail Plan • Plan expense facts • Setup: $295 for plan documents, $12 one-time set-up charge per participating employee • Low ongoing plan expenses ($50.00 per month minimum) • No set-up charge for future hires • No charge for ID cards • No charge for mid-year plan changes TPA Systems, Inc., Houston, Texas 713-641-4720

  16. The TPA SystemsDovetail Plan • Most plans will be Deductible/Coinsurance Only • With 15+ covered individuals, funding objective accurate 90% of the time • Percentage cost of administration is far less than a health insurance policy • HRA benefits are COBRA eligible • Interest: none in, none out TPA Systems, Inc., Houston, Texas 713-641-4720

  17. The TPA SystemsDovetail Plan • Ineligible HRA participants • Owners of sole proprietorships • Members of LLC’s • Partners of partnerships • 2% owners of s-corporations TPA Systems, Inc., Houston, Texas 713-641-4720

  18. The TPA SystemsDovetail Plan Employers love this product because… They Feel Empowered! TPA Systems, Inc., Houston, Texas 713-641-4720

  19. TPA Systems, Inc. P.O. Box 262502 Houston, Texas 77207 (ph) 713-641-4720 (fax) 713-641-4721

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