FAQ’s for Citygate Network Benefits Program
For the 2019 Healthcare Program
Q 1. What are the Fixed Costs?
In 2019, we project the fixed costs to be approximately $3.5 Million. This figure encompasses the Third-Party Administrator (TPA) fees, centralized billing, benefit administration, data analytics, clinical intervention, stop-loss coverage, and brokerage/consulting fees.
Q 2. What are the Total Costs?
Based on an estimated 3,000 participants (40 Eligible Employees from 75 missions or 30 EE’s from 100 missions), the combination of fixed costs and claims is projected to be about $27.65 Million.
Q 3. How will the Program be Funded?
Funding comes from two sources: (1) Missions will pay a refundable buy-in fee of $159 per participant in order to fund an impress balance equal to one week of claims. This amount, projected to be $427,885, is required for compliance reasons. Missions that do not currently offer healthcare will pay a deposit based on 75% of their eligible FT employees. Assuming the surplus supports it, this money will be refunded the next year. (2) The second, and primary source of funding, will be mission premiums totaling approximately $29 Million.
Q 4. How Will the Program Launch be Funded?
ERS has negotiated with all vendors to insure Citygate has no cost tied to the program prior to the January 1, 2019 program effective date. The only financial requirement in 2018 is the aforementioned deposit needed from each mission joining the program. Additionally, Cigna is providing an implementation fund which is projected to be about $250,000. This can be used to create additional program surplus, promotion, communication, technology, or whatever is needed to launch the program, promote and sustain it in subsequent years.
Q 5. How Will the Projected $1.34 Million surplus be managed?
The total projected costs are roughly $27.65M, and the projected funding is roughly $29M, leaving an estimated $1.34M surplus. From this amount, the mission buy-in fees can be refunded. The remainder can earn interest and offset cost increases, so that policy renewals remain stable or go down. We’ll want to use the surplus fund conservatively, especially during the first few years while we collect claims data. It is also important to note that there is an additional $1.9M IBNR built into plan funding.
Q 6. What is Citygate’s Administrative Responsibility?
The TPA’s carry the lion’s share of administrative responsibility, but Citygate will videoconference regularly with ERS, PlanSource, and Cigna in order to provide sufficient oversight of the program. Citygate will also be involved in promoting the program, encouraging members to submit needed information, and answering general member inquiries related to the program. Citygate will assemble a health insurance commission from among its members to give input into the program.
Q 7. What is Enterprise Risk Strategies’ (ERS) Role?
ERS is Citygate’s consulting partner and has been working with our organization over the past 9 months developing this program. They will be responsible for the overall plan implementation/launch, ongoing plan management, vendor management, actuarial analysis, data analysis/reporting, renewal management and overall strategy in collaboration with Citygate.
Q 8. What is PlanSource’s Role?
PlanSource is serving as both our Benefits Administration Solution, Benefits outsourcing/call-center partner and Consolidated Billing TPA. PlanSource will receive premium payments, pay claims, provide and manage the call center for members, and provide the technology solution that members use for enrollment and managing the plan within their missions (gathering information from employees, setting up contributions, etc.).
Q 9. What is Cigna’s Role?
Cigna will serve as the Medical, Rx and Dental TPA and provide stop-loss insurance coverage for claims that exceed $350,000.
Q 10. What is The Standard’s Role?
The Standard will serve as our ancillary benefits provider with products such as Vision (via VPS), Life/Vol. Life Insurance, Short- & Long-Term Disability Insurance and Accident Insurance.
Q 11. What is HCMS’s Role?
HCMS will provide/manage our integrated data warehouse, provide predictive analysis/advanced analytics and engage with AGRM’s high-risk/high-cost members through their predictive high-risk intervention model.
Q 12. What is the Role of Individual Insurance Brokers that Missions Choose to Use?
Missions may choose to retain the services of a health insurance broker. These organizations can serve as “boots on the ground” for direct communication and as a liaison between mission and program or between mission and Cigna. Much of what brokers typically do will be handled through PlanSource and ERS. Brokers will share plan fees with ERS.
Q 13. What is the Timeline?
- June 14, 2018: Citygate members in attendance will see a video about the program and will be invited to an information session at the convention. They’ll review a presentation and meet ERS, PlanSource, Cigna, The Standard and HCMS, all of whom will have a presence in the exhibit hall. Each mission represented will receive detailed plan information to help them understand the difference between their current health plan and the Citygate plan. Shortly after convention, we’ll follow-up with additional information for the entire membership via a comprehensive program website along with the video.
- September 1, 2018: Member ministries will decide whether or not to participate in the program.
- September 1, 2018: (1) AGRM will assemble a Health Insurance Commission to give input into the program moving forward. (2) Member ministries will complete the onboarding questionnaire.
- Late October or Early November 2018: Open enrollment begins. The online portal for enrollment will be up and running and pre-populated with member data necessary for enrollment.
- January 1, 2019: Health insurance plans will be in effect.
Q 14. Please clarify if this plan is a non-ERISA Church Plan or a Multi-Employer Welfare Agreement and explain the difference.
Citygate healthcare program is being set up as an ERISA-Exempt Church Plan. A Church plan is defined in Code 414(e) and ERISA 3(33) and is uniquely available to faith-based employers such as Citygate. ERISA exemption allows for Citygate’s partially self-funded plan to avoid state-level regulations that would otherwise prohibit us from forming a plan via a multi- employer welfare agreement (multi-employer trust) or other aggregation model.
Q 15. Will Citygate establish a Health and Welfare oversight committee?
Yes, Citygate leadership is establishing a Health and Welfare oversight committee for this program.
Q 16. How does each mission attest that they will participate in the association’s plan? Is there a contract we would have to sign?
A well-defined, uniform and straightforward process has been developed by Citygate, ERS and the 3rd party partners that have been selected to administer the program. This process begins with the comprehensive website [www.citygatebenefits.com] which houses information about every component of the program and provides detailed instructions on how missions can join the program. Missions will be able to learn via the website as well as direct communication with the team at ERS via the “contact us” functionality on the website. Once a mission decides to join the program the first step is to compete the Join Now form on the website. Once completed a secure email will be sent with (1) a group health questionnaire (2) census file and (3) instructions for the program deposit. Once a mission completes these items they will receive a welcome email from PlanSource to begin a simple onboarding process via a series of online questions. Responses to the onboarding questionnaire are then used to build each mission’s unique profile within the PlanSource system based on that missions needs and preferences. Where needed, a representative from PlanSource will be available via web-meeting to walk missions through this process and answer any/all questions the mission may have.
Q 17. What is the timeline to build the $1.9M reserve (2 years, 5 years, etc.)
The $1.9M IBNR and additional $1.34M reserve surplus are projected to accrue in the initial 12 months.
Q 18. What happens to rates should enrollment drop below the 3,000 threshold?
Based on the information we have received we believe 3,000 total employees (about 1/4 of Citygate’s total employees nationally) is a realistic initial enrollment number. As such, our analysis is based on the assumption that we will have 3,000 employees enrolled in the program on January 1st, 2019. That said, we have built in $1.35M of projected surplus which can serve to absorb plan cost and/or income variances tied to final enrollment so that we do not have to alter rates. It is important to note that the programs fixed administrative & technology cost are all based on a tiered PEPM (per employee per month) basis and thus will reduce (or potentially increase) based on final enrollment. Ultimately, the more missions that sign up for the program the better starting point Citygate will have as this will produce a greater spread of risk for variable expenses (claims) and drive down fixed PEPM expenses (plan administration).
Q 19. How are pharmacy rebates handed within this program?
As we launch this program we have done everything possible to minimize fixed cost, thereby reducing the premiums employees have to pay in 2019. As such, an incentivized pharmacy credit has been included in the Cigna Medical/Rx TPA quote which has reduced their annual TPA cost by approximately $550,000 (in leu of Citygate receiving quarterly pharmacy rebates down the road in 2019). Once pharmacy consumption data is collected in 2019 ERS will advise Citygate as to potential changes to this structure based on what is in the best interest of Citygate and its member missions.
Q 20. How long is the terminal run out rate? 2 months, 4 months, etc.?
The Cigna lag reporting in the initial 12 months will help determine an estimated terminal or runout liability for the aggregate program. The terminal run out rate for groups leaving the program will need to be determined by the committee, but we would advise 3-6 months.
Q 21. Will run-out claims have stop loss protection for missions that leave the program after the first year?
The stop-loss coverage offered by Cigna is based on a 12/36 contract – meaning that Citygate and its missions will continue to have stop-loss protection for all claims paid within 3-years of the date those claims were incurred. As we launch this program missions that choose to leave the program after the first year will be responsible for the claims they incurred
while covered in the program up to the $350k stop-loss threshold. A mission that chooses to leave the program after the first plan year would also lose their security deposit.
Q 22. Is the deductible embedded into the out-of-pocket maximum in the HSA Plans?
Yes, the deductible is embedded into the out-of-pocket maximum in the HSA Plans.
Q 23. Does the deductible apply before the coinsurance for Inpatient/Outpatient hospital and prescriptions?
Yes, the deductible would apply before the coinsurance for Inpatient/Outpatient hospital for all plans and for the HSA on prescriptions. However, the deductible would not apply for prescription on the PPO plan.
Q 24. Who will set up the Impress Balance and have access/manage these dollars?
The Impress Balance is expected to be $427,885 (based on 1-week of projected claims on 3,000 enrolled employees). The Impress Balance will be funded via mission deposits. These dollars will be put into Citygate’s claims account which will be managed/administered by PlanSource but ultimately controlled by Citygate.
Q 25. Will Ciygate receive monthly or quarterly statements on its claims account and its balances?
Yes, Citygate will receive weekly claim/banking updates from PlanSource and also receive detailed integrated claims and advanced analytics/predictive modeling via the online data warehouse we are developing called OBI (online business intelligence).
Q 26. How are the claims up to $350,000 stop-loss level administered and who will receive and review these reports?
All claims below the $350,000 specific stop-loss level will be paid from the Citygate medical fund which as stated above will be managed/administered by PlanSource. Citygate will have access to weekly claim reports as well as access to an integrated data warehouse we have built for Citygate called “Online Business Intelligence” or OBI for short. OBI will consolidate all data flowing through the Citygate Medical/RX program and allows us to look at a nearly infinite number of variables tied to Citygate’s aggregate data for the purposes of reporting and broader plan stewardship.
Q 27. Explain the impact for Citygate and for the mission that chooses to opt out of the plan during the plan year (Terminal liability; run-out claim dollars; administrative fees, etc.).
The only expense for a Mission that chooses to leave the Citygate plan (regardless of when they choose to leave) will be for paying claims under the $350k Stop-Loss spec level that were incurred while their members were insured under the Citygate plan (aka… run-out claims). This will be administered by sending a monthly invoice to the departing mission for their
claims incurred while insured in the Citygate program. We would recommend a 3-6 month terminal run-out rate but this would ultimately be determined by Citygate. No other expenses would apply should a mission choose to leave the Citygate program.
Q 28. Will rates be re-adjusted from underwriters based upon the Cigna Stop-Loss Group Health Questionnaire? How will this information affect the implementation timeline and each mission’s contribution into the onboarding process?
The only component of the Citygate program that has the potential to change due to final review of the group health questionnaires is the Stop-Loss program. However, this does not mean that the healthcare rates will necessarily change. As discussed, ERS has built in a $1.34M projected plan surplus via the rates we presented so there is room to absorb potential increases to Stop-Loss rates in the event this should happen. Please note that the current projected annual cost of the stop- loss program is $1.9M so the rates would have to increase drastically to run into a scenario where we would have to consider modifying the rates we have proposed prior to the launch of the program on January 1, 2019.
Q 29. Is the group questionnaire processed yearly or is this a one-time evaluation?
This is a one-time evaluation that will not be repeated in subsequent years.
Q 30. What are the medical plans and corresponding rates?
Q 31. Our mission does not have a January 1st renewal date so how do we join the program given our renewal date doesn’t align with this new program?
Many missions do not currently have a January 1st renewal date. That said, the transition to a January 1st plan year is a simple one for most missions. Simply go through the normal healthcare renewal process as you typically would and then provide a 30-day (minimum) cancellation notice effective January 1, 2019 to your health insurance vendor. You will then go through the enrollment process for the Citygate Network Benefits Program and new ID cards will be sent your employees for the January 1st, 2019 plan effective date. If your mission is currently not in a traditional, fully-insured healthcare program please contact our team via the Citygate Network website (www.CitygateBenefits.com).
Q 32. Are there any pre-existing condition limitations in the Medical/Rx program?
No. There are no pre-existing condition limitations in the Citygate Medical/Rx program.