Program Description:
Self Funded / Aggregate Deductible programs offer the same coverage as fully insured / traditional insurance products. Aggregate deductible plans provide HMO / PPO Denial, Maximum Benefit of 90,000 (effective 2010-11) for NCAA institutions and $25,000 for NAIA and JC / CC programs.
Comparing Aggregate Deductible Programs with "Traditional" / Fully Insured Programs:
"Traditional" Product Example: $100,000 Premium with a $0 Deductible
- School pays $100,000 at beginning of school year and in this case, has no additional responsibility due to the "$0 Deductible". If the school had a $500 deductible, the school would be responsible for paying the first $500 per injury.
- If $60,000 in claims occurred throughout the benefit period, then the school would have no additional responsibility. Maximum exposure and cost to the school for the year is $100,000. Insurance company would pay all $60,000 in claims.
- If $130,000 in claims occurred throughout the benefit period, then the school would have no additional responsibility. Maximum exposure and cost to the school for the year is $100,000. Insurance company would pay all $130,000 in claims.
Aggregate Deductible Product Example: $75,000 Deductible with $30,000 in fixed cost (Premium, TPA Fees, Taxes, Sales Expenses); Total Cost = $105,000
- School pays $105,000 at beginning of school year. Note: School could elect to partially fund the "aggregate deductible. In this case, school could choose to pay $40,000 (plus the fixed cost) at the beginning of the year and then fund the remaining $35,000 if and when needed.
- As in the example above, if $60,000 in claims occurred throughout the benefit period, then the schools self funded (aggregate account) would pay the $60,000. In the event that the school fully funded their $75,000 account, they would receive a refund of $15,000 for "unused" claims money. Maximum cost for the school year would be the $60,000 in claims plus the $30,000 in insurance cost for a total cost of $90,000 vs the $100,000 in the fully insured / "Traditional" program.
- As in the example above, if $130,000 claims occurred throughout the benefit period, the school's self funded portion of $75,000 would be depleted and the remaining $55,000 would be the responsibility of the insurance company. The school's maximum exposure and cost would be $105,000.
Summary
The aggregate deductible option provides the school to recover money when they experience a good claim year vs the traditional product. When school's have bad claims year the school is still protected against a large pay out.
When schools have a a previous high claims year and are anticipating a premium increase, it is a good option to consider a self-funded / aggregate deductible program.
Philosophy
Trustway T.E.A.M. Services strives to provide school's with options for both traditional and aggregate deductible programs as well as an analysis as to what combination of products have the best possible opportunity to protect the school against undue cost.
Additional Information
If you would be interested in learning more specifically how a self-funded / aggregate deductible program would work for your program, please complete the information form below and a Trustway T.E.A.M. Services advisor will be in contact with you.
Information Form
Name:
Title:
School:
State:
Phone:
Email:
Thank you for your interest in Trustway T.E.A.M. Services!
