Carrier – Trustmark

Jason Powers: I’m Jason Powers and I am joined by George Michelic, the senior account executive with Trustmark small business benefits. George, I appreciate you taking the time out of your vacation, buddy. This is the treat to have you on, and we appreciate you being here. Part of our carrier product update series. It’s a special edition of that. This is our Q4 kickoff summit, and we’re here talking to brokers about what to expect in the busy fourth quarter selling season. And they’re all tuned in and ready to learn about Trustmark. I almost said, I’d almost said StarMark, George. Trustmark small business benefits lovingly referred to as StarMark for almost my entire career. George, thank you for being on.

George Michelic: You’re welcome.

Jason Powers: You’re welcome. What’s going on with Trustmark in the small business side of things. So we’ve got Beau here in the studio. He’s going to help flip through some of the slides. So if you want to tell us a little bit about Trustmark, for those who may not know about Trustmark, what do they need to know?

George Michelic: Well, thanks, Jason. I appreciate the opportunity to get in front of your brokers to talk about Trustmark. A lot of people know the name StarMark and I’ve been with the Trustmark companies for 40 years and probably 15 of those years was with StarMark and StarMark had the reputation of being a small group, TPA using Trustmark as the insurance company. And we’re going very strong. Our minimum size is five lives. We are all self-funded. We do PPO, we do CDHP. And about three or four years ago, we introduced a reference based pricing. And today I’m going to talk a little bit about reference based pricing, because it is a important segment of Trsutmark’s business to give you an idea about 40% of all our sales in the last two years has been reference based pricing. So we tailored it to fit the small to mid-size businesses.

So when I say small to mid-size, we’ll start at five, but realistically our sweet spots, probably in the high teens to the upper twenties, we’re nationwide. So we’re in the 46 of the 50 states and we’re writing business in most of those states, on the four states that we’re not in Jason is New York, Vermont, North Dakota, and Hawaii. We can write business in other states and have employees in those states, but the contract has to be in one of the 46 states we’ve been doing, like I said, we’ve been doing self-funded since 2007. So we consider ourselves a pioneer in the self-funding business. We do five different surplus options. So there’s price points based on what surplus option you choose. And this shows you what… You want to go back to the second slide.

Jason Powers: Sorry, sorry.

George Michelic: Yeah. So this is your self-funded simplified. We collect a amount from the employer and it’s divided into three different buckets.

The stop loss premium, which includes specific and aggregate stop loss. The administration expenses, that’s the cost to keep the lights, to if we’re doing a PPO to pay the vendor, the access fees, and then the important bucket is that aggregate claim liability. So that’s where money is set aside to pay for the everyday claims. And if there’s money left over, go to the next slide, please, if there’s money left over, there’s a five different options to offer at the time of sale for surplus, you can do a half surplus option, which means half of the money that is left over goes to pay administration fees for the next year. So naturally the group has to renew with us. There’s a two thirds option. There’s also a two thirds cash option.

There’s a 100% cash option. And then there’s the traditional cash option. And each one of those has different price points. Jason, so give you an idea if you choose the half surplus, which is our most popular, and you go to the highest one, there’s about a 4% to 5% total of savings that the employer could have there by going from the traditional a hundred percent down to the half so, they could have that option. And then at renewal time they can change to a different option.

Jason Powers: I know we typically see the admin fee credit, the half admin fee credit is probably, would you say that’s probably the most competitive position offered or?

George Michelic: Oh yeah. That’s about 70% of the business that we sell. New business will go with the half surplus because again, if they’re coming from a fully insured plan, they’re not getting any money back anyway. So this saves them premium upfront, and it gives them an option to have some premium savings next year, if they renew with us to take off the administration fees. So definitely the choice that we’re seeing from employers. And that’s what usually when we quote our cases, we go out with the best price possible and then if they want to make some changes, they can do that during the negotiation of the pricing.

Jason Powers: Got it. Okay. From the plan design perspective, I know our theme for the day is, you guys kind of fall in that same category of some of our other guests today that there’s not really a product grid, right? It’s not a cookie cutter solution. We can pick and choose different levels of benefit based on the product that we’re putting in place. You call that the healthy choices.

George Michelic: That is the RBP plan and you’re right. I mean, we have thousands of different plan combinations. So, can do zero deductibles, you can do $5,000 deductible, different copays, different co-insurances, different drug cards. So yes, there is no cookie cutter. And then when you do a proposal from us, when you guys do it in your office, you can do up to four different plans per proposal, which is nice. So you can see different deductibles if you want to show on one screen, different surplus options, different drug cards, you can show all that on one screen with four different plants.

So let’s get into Trustmark healthy choices. Again, like I said, this is an important segment of trust. Mark’s business of over almost 40% of our business in the last two years has been with healthy choices. And again, what is reference based pricing? It’s the practice of repricing claims to a reference point, like a percentage of Medicare or a cost based data set. And we’re seeing more and more carriers getting into reference based pricing. I think the main reason is it’s cost effective. I mean, in some areas with trust mark, it could be a 25% difference between a similar PPO and a reference based pricing product. And then there’s some areas that you’re not going to see much difference depending on what the PPO discounts are in those areas. Next slide, please.

Next slide. Not Jason. Next one. Here we go. So why Trustmark healthy choices? It’s a lower cost alternative. It’s unique, not everybody is showing this. So if you’re a new broker or you have a new client and you want to get in the door with something that’s different, unique, definitely. This is not a network. So it is freedom of choice to use any provider you want so it’s kind of different than what it is in the past, where you look up a network in a booklet or on a screen here, there’s no provider. And then of course we always have flexible broker compensation. One unique thing that we’ve done just recently last two years is we’ve done a hybrid model of our reference based pricing. So if there’s a broker out there, that’s a little weary about going full blown in the reference based pricing. We now can offer a PPO for the providers and practitioners using multi plan network, and then going with reference based pricing with the facilities.

And that’s probably somewhere between a PPO price and a full blown RBP price. So that’s something that we put in the marketplace maybe about two years ago, and we’re seeing some traction in that, next, oh, by the way, we can onboard groups and Jason knows this as well as anybody. We are really quick with our turnaround. So if we get everything in the house, we can have it onboarded in as little as five days. That means getting temporary ID cards, getting all the employees and dependents loaded into the system, getting a group number, everything like that in five days. So that’s pretty important.

So plan design overview. There’s no in and out of network benefit differential. So when you see a deductible of 2,500, that’s the 2,500, there’s not an ind network deductible or an out of. Freedom of choice for most covered expenses or most covered services, except for organ transplants and specialty drugs. We use a reference based pricing to calculate the claim payments. So we use 130% for providers and 150% for facilities, majority of the doctors except Medicare now. So it’s not anything new. And they’re actually getting a little more by doing this product than what they were getting with a straight Medicare patient. And then we mentioned the hybrid option for practitioner only using the multi plan network for the PPO providers and practitioners.

Next slide please. So we have a very well designed website. We’ve gotten many, many accolades from brokers and members and employers of our website. So all of the forms, all of the flyers there’s videos, there’s presentations, there’s all these types of educational material is all out on our website. So I encourage you to get into the website log in, and then you can see all of the forms that are available. And some of the forms are broker driven, employer driven, employee driven. So if you’re looking for something specific, either whether it’s with our healthy choices, our PPO with our administration kits, or just some frequently asked questions, they’re all out there on our website,

Something new that we’ve added with reference based pricing, because we’ve heard from employers, employees, even the administrators at the doctor’s office that they need a contact point. If they’re they run into an issue, a balance bill issue or a provider is balking at taking this plan because they’re saying it’s not insurance. So we’ve developed a trusted member care team with trust mark out of our Boardman Ohio office that they are specialists. And that number is on the ID cards now. So if a member went into a doctor’s office and the doctor wasn’t familiar with reference based pricing, we don’t want the member to explain the plan to the administrator or to the billing person. We rather have that administrator call a trusted member care specialist and they will explain the product, how the payments work and majority of the time the administrator then understands it and then accepts the plan.

One hurdle that you have when you’re doing a reference based pricing, full blown product, there’s no network ID on the card. And that kind of stops everything. When an administrator sees that, because they say, “Well, wait a minute, I don’t see a network on here. So this must not be insurance.” And so we redesigned our ID card to hopefully try to avoid that question that we get from the billing person or the administrator at the doctor’s office. But they’re help with finding a provider. That’s a reference based pricing provider that has accepted reference based pricing. They help educate about the plan designs. They help members understand the EOBs, answer provider questions, again, if you have a balance bill, they’re there to help those out again. We guarantee no balance bill, as long as we get it from the employee in a timely basis. So that always helps. And then it streamlines lines the product also we use clear health solutions as our third party vendor for negotiating the balance bills that we get from providers. Next slide.

Reasonable fee. Again, we use a negotiated rate or a percentage of the Medicare rate. And right now what we use is 130% for providers and then 150% for the facilities. And it seems to be working good. Now we have made some changes where there are single case agreements. So there might be a doctor, I’ll get you an example. And this was in a Kansas group that it was a large group. It was over a hundred lives. And they were in office park that had many, many different companies there. And it just so happened that a doctor had a facility in that office park and he was treating not only the company that Trustmark wrote, but other patients from other companies. So he asked to have a single case agreement where we then increased what he was going to get as a charge. It went from 130.

I can’t remember what the final, it was a long negotiation process, but he was happy. And then he said that we wouldn’t have any balanced bills with him because he was getting a little more than what our standard reasonable customary fee was, so that worked out really good. And I see that in the marketplace now more and more single case agreements with not only hospitals, but with providers also. Next slide, please. So how it works, education again, education is the key and we have a lot of flyers on our website that talk about education. The agent has to have a meeting upfront, not only with the employer, but with the employee and talk about reference based pricing, how it works. And then they choose a provider that best suits their needs. The regional fee is calculated and paid, trusted care member gets involved.

Our dedicated specialist work with providers to resolve any balance bills. Additional payments for resolved balance bills are paid from the employers prefund or the stop loss insurance. And then health plan payment must be issued no later than the end of the runout period. Our runout period is 15 months after the end of the contract. So it’s a 12, 27, sorry contract. So again, education is the key and also getting trust. If you do get a balance bill, the employer, the employee gets a balance bill that they get that into Trustmark as soon as possible. And there’s different ways to do that there’s an email, there’s a fax, there’s different ways to send that into our claims office in Boardman, Ohio, and then it gets resolved. And again, if there are some balance bills, those are paid out of either the claim fund or the stop loss. Balance bill protection. Again, members are responsible for out of pocket expenses. So deductibles, copays, things like that, and they’re not responsible for anything charged above the reasonable fee for covered expenses.

So that’s basically it for that. We do an HD HP product now with this, the only difference there is that the amount applied towards the members’ deductible has to be satisfied first, before balance bills are paid on that, that has just been added. Educational healthcare savings, these are all things that we have on our website, grand rounds, Teledoc healthcare blue book is an online quality and cost transparency tool. Basically it’s based off of a traffic light, red providers, green providers, yellow providers, the green ones are mostly cost effective. Plus they have a better outcome. Usually we have care champions so that’s a 24/7 service lifestyle management. If someone is 50, it’s a automatic letter that goes out to them saying, Hey, it’s time for your colonoscopy. So it’s kind of a reminder tool. And then the healthy foundations there’s wellness tracking that they could do. And then also it includes a maternity wellness program.

So as far as plan designs, there’s nothing difference between a healthy choice and a PPO as far as options, they all have the same options. The only difference is with a healthy choice, there’s no out of network option. It’s all in network so you can use… And we also offer multiple plans. So you’re going to have a healthy choice plan, you can have a PPO plan and then you can have a CDHP plan. You can have up to four different plans for an employer with five or more employees, as long as one person is in each plan at the time of enrollment.

And then as far as PPO, we rent the Aetna signature administrators, a network, and we also rent Cigna. And if you were to ask me, as far as which one is better, it’s about 50/50 as far as enrollment with trust mark using Aetna or a Cigna. And as you know, Jason, when you guys do your quoting for us, the system will automatically generate which network is available as far as less expensive and also coverage type. So it will show whether it’s Aetna or Cigna and it can be changed if you’d like.

Jason Powers: You know what I like about that in your system, George, now that you mentioned is that you actually show the percentage differential if we wanted to select another network. So if we were automatically quoting a Cigna network and we were looking at more, maybe a regional network as an option, I don’t have to really do a lot of work to figure out what that rate differential is. It’s going to tell me, “Hey, this is going to be 7% higher.”

George Michelic: Yep. Yeah. That has been used a lot. Because I’ll go online and somebody say, “Hey, they got Cigna, but the default was Aetna.” And right away I could show them. I said, “Yeah, they can go Cigna.” I can tell them the coverage also percentage. And then like you said, I can tell them what the pricing impact’s going to be. And usually they go with what the default is, majority of the time. Yeah.

Jason Powers: So I mean, interrupt your flow. So what’s underwriting look like these days?

George Michelic: Well, I just got an email from Tammy Lichens who is our head of underwriting and we’re talking about paper apps, we’re talking about simplified underwriting, GRX underwriting. And she did a study in the last four years, almost 40% close ratio on submissions using paper apps. So we’re leaning more towards paper apps for the under 50 and even maybe 55 to 60. If the employer is willing to do paper apps, I think you’re going to get a better price based on what we’re seeing right now. And then of course we can use form fire. We can use other carriers apps as long as they’re approved.

And then there’s an amendment that has to be filled out from the employee to give us authority, to look at those other carrier apps. So we’re trying to make it simple. But bottom line, Jason is we’re seeing the trend more towards paper apps, getting a better pricing. And then when you do paper apps, you can negotiate with underwriting based on they see what the conditions are. And maybe we could then move that condition from a high risk to a medium risk just based on maybe a phone call or a questionnaire being completed.

Jason Powers: That’s good to know. Good to know. We’re a big fan of taking applications through farm fire here. And so it’s not a challenge on our end. We do appreciate that you guys do a simplified approach, but also understand the challenges of what that does on the risk side of things. Really trying to pinpoint coming on the risk side, instead of looking in the rear view mirror and trying to-

George Michelic: Right, right. And as you know, we have a very lax participation guidelines. I mean we require 75% of the eligible after valid waivers with a minimum of five enroll. We don’t have any contribution requirement from the employer of probably last four or five years. We don’t require a wage and tax report. So that speeds up things. We’re writing a lot of Virgin groups. We’re seeing that and we’re writing about 25% Virgin groups with the healthy choices, we’re seeing that.

Jason Powers: Wow.

George Michelic: And then, like I said, onboarding, I mean, we can get a ID cards. We can get group number acceptance letters within about five days. So our services topnotch and as anybody who has worked with StarMark or Trustmark in the past, knows that, that’s what we really hang our head had on is our service in our underwriting.

Jason Powers: I think you’ve got another slide here to maybe give some thought for brokers to think consider on the way out, right?

George Michelic: Yes. So we have our in-house health reimbursement arrangement, HRA. So there’s no cost, no setup fee. There’s no administration fee. And because we’re the TPA and the insurance company, everything’s seamless when doing an HRA with us. So I encourage you to look at that, set it up. We have many, many options of how to do it. We can do a backend front end, 50/50. There’s a lot of choices there. And then don’t, not a bank. So we don’t are not an HSA, but we have cases or we have plans that are qualified HSA plans. And then again, we can offer up to four different plan designs to a group, as long as it has five or more members. And one is in each plan. So multiple options, we’re seeing a lot of multiple options. We throw a little life in there, a little, AD and D, but be honest with you. We’re not writing a lot of that. There’s other carriers that are more competitive than that. Our bread and butter is our health plan.

Jason Powers: I got five of them lined up to come out and talk to us tomorrow.

George Michelic: That’s right.

Jason Powers: Well, George, I don’t want to keep you, I do appreciate you taking the time. I really do. Thank you for being part of our carrier product update in this Q4 summit. Any parting thoughts forbrokers as they head out into the busy season?

George Michelic: Well, if you’re going to quote a PPO with legacy, ask them to put the healthy choices side by side, just to see what that impact is. I mean, again, there’s certain regions of the country, mostly the north, or I’m sorry, the Northeast, it’s not that big of a spread between healthy choices, but you go out west Midwest and that you definitely will see a huge impact. And if you can educate your employers, employees, it might be a nice door opener for you to get a new client or some new business. So reach out to Jason and the guys over at legacy. They’ve been with us for a long, long time. And we appreciate having us, having me on this and good luck.

Jason Powers: Yeah. Well it’s certainly good luck and have a prosperous Q4. Agents you heard it from George. If you got cases that you’re looking at and you’re seeing trust mark proposals from us, and you’re not seeing those healthy choices options, which we do try to get those in with every case. But if there’s something you want to see, we’ve got a lot of flexibility, obviously in the plan design and the networks that we can choose and funding options and surplus options. So be sure to get… Get with your representative here at legacy brokers. We’ll get you everything you need until then have a prosperous Q4. George, thank you very much again.

George Michelic: Welcome. Jason.

Jason Powers: Brokers out there. We’ll see you next time.

George Michelic: All right. We’ll talk later.

Jason Powers: Thank you.

George Michelic: Bye guys.