Group Medical

shutterstock_92983651Power Kunkle Benefits Consulting’s intimate knowledge of the health insurance market coupled with our “what matters to you philosophy” allows us to determine a solution to best support your business objectives.  If you are looking for fresh ideas and a new approach to standard renewal alternatives, we can help.



With a unique consultative approach the team at Power Kunkle will educate you on the latest trends and provide solutions that analyze:

  • The differences between a traditional benefit plan or Consumer Driven Health Plan
  • The pros and cons of renewing in a Fully Insured Plan or transitioning to an Alternative Funding Arrangement
  • The advantages and disadvantages of the proposed Exchanges in accordance with the Patient Protection and Affordable Care Act (PPACA)

    Defined Contribution

    Defined Contribution plans are designed to control employer costs while providing employees with choice.

    • A defined contribution arrangement enables employers to share costs with employees to the degree they wish and cap their total health care costs
    • This platform allows employers to offer their employees-for the first time-real choices in health care coverage to meet their personal needs
    • Plan choices are made via user-friendly website that offers employers easy administration and employees a simple enrollment process

    Consumer Driven Health Plans (CDHP)

    As an alternative to the traditional benefit plans (Indemnity, PPO, POS, & HMO), Consumer Driven Health Plans provide a unique approach to health care. Defined narrowly, CDHP’s are health plans in which employees have personal health accounts to pay routine health care expenses directly, while a high-deductible health insurance policy protects them from catastrophic medical expenses. CDHPs shift the burden of making cost-effective health care decisions from the employer to the employee.
    There are several different types of CDHP’s.

    • MERP (Medical Expense Reimbursement Plan)
    • HRA (Health Reimbursement Account)
    • HSA (Health Savings Account)

    Employee Benefits Series HSA/FSA/HRA (PDF file)

    Fully Insured

    The majority of health insurance plans are written on a traditional fully insured arrangement. The health insurance carrier sets the rates based on demographics and depending on the size of the account past experience or medical underwriting.

    Groups with more than 100 enrolled employees are experience rated and rates are developed using the demographic mix and claims history. For groups of this size there is typically flexibility with choice of plan design and most carriers will provide the plan administrators with claims data.
    Groups with less than 100 enrolled employees are community rated and rates are developed using the demographic mix and the experience of the carriers entire book of community rated business. For groups with less than 50 employees, most carriers also require some type of medical underwriting.

    Alternative Funding

    Alternative Funding Arrangements are offered by employers who directly assume the major cost of health insurance for their employees. Some self-insured plans bear the entire risk. Other self-insured employers insure against large claims by purchasing stop-loss coverage. Some self-insured employers contract with insurance carriers or third party administrators for claims processing and other administrative services; other self-insured plans are self administered. Minimum Premium Plans (MPP) are included in the self-insured plan category.

    • Self Funding
    • Captives
    • Consortiums
    • Co-Ops

    Components of Self Funding

    • ASO (Administrative Services Only) – An arrangement in which an employer hires a third party to deliver administrative services to the employer such as claims processing and billing; the employer bears the risk for claims.
    • Stop-loss coverage – A form of reinsurance for self-insured employers that limits the amount the employers will have to pay for each person’s health care (individual limit) or for the total expenses of the employer (group limit).
    • Third party administrator (TPA) – An individual or firm hired by an employer to handle claims processing, pay providers, and manage other functions related to the operation of health insurance. The TPA is not the policyholder or the insurer.

    How The Group Health Captive Works:

    A group of employers form a Group Health Captive in an effort to reduce the cost of health insurance. It can be formed with a variety of employer groups such as:

      1. Existing Group Captives or Risk Retention Groups
      2. Existing Self-Insured Groups for Workers Compensation
      3. Trade Associations
      4. Purchasing Cooperatives
      5. Franchisees
      6. Portfolio Companies of Private Equity Firms
      7. Each employer has the ability to offer any medical plan design.
      8. Each employer’s rates will be based on the demographics and risk inherent in their own group.
      9. Employees with chronic conditions are identified and nurses engage these employees on a proactive basis to help them better manage their health.
      10. The Group Health Captive eliminates carrier profit, minimizes state premium taxes, and uses proven risk reduction strategies.
      11. The result is a likely savings of 10%-20% in year one, and significantly greater savings in future years.


    Through the consortium model, employers join together to benefit from economies of scale and cost efficiencies in a self-funded environment while maintaining their own benefit plan design, employee contribution structure and rates.


    Cooperatives are typically for the Public Sector Employer (counties, municipalities, authorities, regional municipal entities, and school districts), joint purchasing affords entities the opportunity to access the benefits of self-funding their employee health benefits in a safe and secure environment. It does so by utilizing a unique risk transfer approach coupled with limited risk sharing. The end result has stabilized health insurance premium growth while providing a platform to control health insurance costs both by retaining underwriting gains that would otherwise flow to insurance carriers and by focusing on strategies that reduce claim costs.

    What is the SHOP Marketplace?

    • The Small Business Health Options Program (SHOP) Marketplace helps businesses provide health coverage to their employees.
    • For 2014, the SHOP Marketplace is open to employers with 50 or fewer full-time-equivalent employees (FTEs). If you have fewer than 25 employees, you may qualify for tax credits if you buy insurance through SHOP.

    How to know if you qualify for the SHOP Marketplace?

    • In 2014, SHOP is open to employers with 50 or fewer full-time equivalent (FTE) employees. Use our FTE Calculator to find out if you qualify to use SHOP.
    • In order to use SHOP, you must offer coverage to all of your full-time employees – generally those working 30 or more hours per week on average.
    • At least 70% of your full-time employees must enroll in your SHOP plan. (Employers who apply for SHOP coverage between November 15 and December 15 each year can enroll without meeting this requirement.)

    For More Information Visit:

    Private Exchange

    A Private Exchange is an online tool developed to assist individuals in purchasing employer sponsored benefits. Unlike the Public Exchanges (state and federal), private exchanges are not part of the Affordable Care Act and individuals cannot claim subsidy money through a private exchange.

    For employers looking to keep the cost of offering health benefits manageable, private exchanges are a creative way to assist with a defined contribution strategy. (can we link to defined contribution if they click on it?)

    Here’s how it works:

    • The employer chooses what plans are to be offered on the exchange. (i.e. various health plan options and other benefits, such as dental, vision, life and disability insurance)
    • The employer selects a set amount of money for each employee and then directs them to use the private exchange.
    • Private exchanges are equipped with decision making capabilities providing employees a unique tool to assist in their shopping experience. After answering a few simple questions, individuals are steered toward the plans that best fit their needs.
    • Employees select and “purchase” their coverage options online. Benefit selections are submitted to carriers, eliminating the need for paper applications.

    Private exchanges are created by private sector companies – for example, by a health insurance company, or a brokerage or consulting firm. There are many options available depending on what an employer is looking to offer.

    Power Kunkle has access to several private exchanges. When it comes to selecting a private exchange, we believe there is no “one size fits all” solution. By conducting a thorough needs analysis we work to find the private exchange that is the best fit for you.