FAQ Page

Yes, however, because the Captive renews on January 1, all Subscribers must eventually renew on that date. New subscribers with an off-calendar year effective date will be written as such:

• February-September will be written as a 12-month contract and at the first renewal will be written as a “short” contract to bring them to a 1/1 renewal the following year.
• February-September can be written as a short contract to renew 1/1 in the current year.
• October-December will be written as a 15-13-month contract.
• October-December can be written as a short contract to renew 1/1 in the current year.

Collateral is based on a percentage of premium, so the collateral requirement can be adjusted as premium changes at renewal.

The Subscriber will be credited with the collateral funds withheld in the captive during renewals, so “collateral stacking” is not required like most employee benefit captives. Stacking occurs when each Subscriber’s contribution is assigned to one underwriting year and cannot be allocated to Subscriber or following policy year until the first year is closed out. Most captives require Subscribers to put 2-3 years of collateral into program before the first year’s funds are returned (if at all).

Prospective Subscribers coming from other Captive programs will be offered a “collateral bridge,” so they do not have to fund the program’s collateral requirement all over again in year 1. Coverys will cover the prospective captive Subscriber’s reserve requirement until their funds are released from the previous program. Subscriber is requested to forward the collateral to Coverys after receipt from the program they exited.

There are “shelf” plans available or benefits can be customized.

Benefits can be negotiated during implementation.

The Captive shared layer of risk is $300,000 above the Subscriber’s Individual Specific Deductible.

Yes, each Subscriber will have specific and aggregate protection and be issued a stop-loss policy like a traditional self-funded plan.

Yes, specific and aggregate terminal liability options are included. The options provide run-out coverage for covered expenses incurred before the stop-loss contract termination date and paid within 90 days after the termination date. These options are void under early termination or moving to another self-funded arrangement. Option election must occur at least 90 days before the end of the contract period.

• Specific: Provides 90 days of run-out on Specific Stop Loss Coverage.
• Aggregate: Provides 90 days of run-out on Aggregate Stop Loss Coverage. Aggregate factors for the run-out period will be recalculated at the time of option election. In consideration of the Aggregate Terminal Liability Option, the group will be required to pay an additional aggregate premium of $5,000 upon option election.

• Subscribers are offered the SummaCare networks 
  to their maximum discount level.
• Members of other captives transitioning to this 
  captive will be offered a “collateral bridge,” outlined 
  in the collateral section within.
• No “collateral stacking” required, outlines in 
  collateral section within.
• The pool’s unused premiums will be allocated to 
  Subscribers approximately 180 days after their 
  renewal (versus 1-2 years in most captives).
• Subscribers will receive quarterly reports on the 
  captive’s performance, so the Subscribers are 
  informed in real time.
• Firm, January 1 renewals for the entire pool 
  of Subscribers will be released in September.
• Level funded and pay-as-you-go options are 
  available.
• 90% of actual rebates earned will be passed 
  through.
• All claims funds are retained and unused premiums 
  are allocated to the Subscriber (versus other 
  programs where an administrative credit is given, 
  if you renew).
• Subscribers in the Captive will be fully funded 
  (limited to the maximum costs and collateral as 
  defined in their stop-loss contract). Many other 
  Captives perform a retroactive review, and the 
  Subscriber may be required to pay additional 
  funding, based on performance. 
• Each Subscriber will be supported and protected by 
  a reinsurance carrier. Many Captives do not have the 
  backing of an “A-rated” carrier.
• Subscribers in the Captive will have transparent 
  access to their claims data.
• No entry fees or financial penalties for exiting.

• Like a traditional self-funded plan on a pay-as-you-go basis (as claims are incurred and processed for payment).
• Level-Funded uses PEPM Budget Rates, which can be calculated during the quoting process. PEPM Budget Rates include fixed and variable costs based on enrollment at the time.
• 4-Tier Budget Rates can be provided.
• FIE rates that are based on expected or maximum claims.
• Subscribers moving from a fully insured plan are encouraged to Level-Fund by pre-funding claims to the maximum liability for the first policy year.
• Any unused pre-funded claims will be retained 100% by each Subscriber in their claim account to build reserves and use for future health insurance-related costs.
• After the first policy year, the Subscriber determines how much, if any, of their reserves are maintained in their account and the amount for pre-funded claims for the next year.

There is no financial penalty for leaving the Captive. Subscribers will be free to leave if desired. Each Subscriber will be responsible for claims incurred but not paid at the time of termination (run-out). A terminating Subscriber may use its reserves to fund its claim run out. A terminating member Subscriber will also have specific pre-paid coverage from the stop-loss insurer (Terminal Liability) to insure claims above their specific and aggregate deductibles during run-out.

Coverys is a wholly owned subsidiary of ProSelect Insurance Company. Coverys provides the stop-loss policy to each Subscriber and reinsures the Captive for losses above its unique loss limits. ProSelect is a domestic insurance company that is A-rated by A.M. Best. They are regulated by the Department of Insurance for the state where the policy is issued. Coverys’ stop-loss policy is filed and approved in all states currently represented by Subscribers.

A consortium of independent employers, known as “Subscribers,” purchase stop-loss insurance and are structured as a self-funded group in a stop-loss Captive.

Aggregate Accommodation provides the Subscriber with a monthly cap on claims that apply to the Aggregate coverage. The cap is set based on the cumulative monthly maximum claims. It is included in every proposal with the option for purchase and is useful when Level-Funding.

Claims up to the Subscriber’s liability that exceeds the Subscriber’s account balance must be funded by the Subscriber. The TPA can then file an Aggregate Accommodation claim with Coverys on behalf of the Subscriber. Coverys will reimburse the Subscriber.

Collateral is the investment each Subscriber makes in the Captive to cover liabilities exceeding the Captive Risk Premium. Collateral is typically 13-16% of each Subscriber’s final gross written premium. It will be estimated on the proposal and finalized once the sold premium is finalized. An invoice for Collateral will be included in the Coverys Binding package.

Collateral can be paid in full upon joining the program or can be paid in monthly installments by having the TPA bill the Subscriber and submit it to Coverys, or the Subscriber can pay it directly to Coverys.

Collateral will remain intact each year unless annual claims for ALL Subscribers exceed the cumulative risk premium of ALL Subscribers. If collateral is used the Subscriber will reinvest the used portion of the collateral.

Additionally, if the use of the collateral is required to fund the deficit of Risk Premium and the collateral is insufficient to cover the shortfall the reinsurer (Coverys) will fund the balance.

• 50% Expected Claims
• 10% Maximum Claims
• 30% Stop Loss Px
• 6% TPA/Network
• 4% Broker/Consultant

125% of expected claims.

Summa is offering their best networks in conjunction with their most competitive discounts available: SummaCare SCPremier, SummaCare SCSelect and SummaCare Preferred Choice Networks.

90% of actual rebates earned will be passed through. Rebates may vary significantly depending on brand and specialty utilization.

Rebates will be estimated on the proposal based on current member enrollment at the time of the proposal. A more precise estimate can be provided upon review of the employer’s more recent 12 months of prescription utilization.

Rebates will be paid quarterly with a 90-120 day initial lag time.

The Captive reinsures the risk between the Subscriber’s deductibles (specific and aggregate) and $300K. Claims above the deductibles, but less than $300K, are transferred to and paid by the Captive loss fund. Losses within this layer more than the Captive’s loss fund are paid by the reinsurer.

Each Subscriber has the autonomy to choose their specific stop-loss deductible based on their size and risk tolerance. The minimum specific deductible is $25,000.

It is a heterogeneous Captive and therefore open to employers in all business segments with 25+ insured employees.

The Apex Alternative Funding Captive has a universal renewal date of January 1. All groups entering the captive will be required to transition to a January 1 effective date if the issued effective date is not on this cycle. Groups will achieve this transition at renewal by way of a short or long contract option depending on the issued effective date and which will be at the discretion of the underwriter.

MedImpact.

Apex Health Solutions is the Third-Party Administrator.