How Self-funding Works

1. How Self-funding Works

2. Fully Insured • Partial Self-funding Administration 100% Non-refundable Premium Stop Loss Premiums Potential Claims (Opportunity to Save)

3. Claims treated as expenses • Potential for savings • Most premium taxes avoided • Avoid certain coverage levels • We manage self-funding • Specific stop loss • Aggregate stop loss

4. Stop Loss limits your liability Specific stop loss limit = $40,000 Individual catastrophic claims = $50,000 Amount paid by insurer = $10,000

5. Stop Loss limits your liability $400,000 x 125% = $500,000 $500,000 = Attachment Point

6. Maximum funding recommended • Fully Insured Maximum Cost = Total of all premiums paid 100% Non-refundable Premium

7. Maximum funding recommended • Partial Self-funding Administrative Expenses Stop Loss Premiums Maximum Claims Administration Stop Loss Premiums Potential Claims (Opportunity to Save)

8. Example Covered Employees: 65 Annual Premiums: $450,000 Monthly Payment: $37,500 Claim Payments: $170,000 Annual Premiums: $450,000 Claim Payments: -$170,000 Carrier Profit: $280,000 Claim Reserve: $60,000 Administration = $20,000 Stop Loss Premiums = $130,000 100% Non-refundable Premium = $450,000 Actual Aggregate Claims = $170,000 Actual Savings = $130,000

9. Example $ 20,000 + $130,000 $150,000 $12,500 per month Claims paid: $170,000 Savings: $130,000 Administration = $20,000 Stop Loss Premiums = $130,000 100% Non-refundable Premium = $450,000 Actual Aggregate Claims = $170,000 Actual Savings = $130,000

10. Funds belong to your company Flexible plan design Compare at no cost or obligation Accurate claim settlement Greater financial control Access plan information 24/7 Decision making Monthly management reports Plan for the future Adapt to change Meet employee needs In Summary