The Challenge/CBA Wellness Solutions

The Challenge

As a business leader, what comes to mind when you hear the term “health insurance”? If you are like other mid-market businesses, you’ve probably been frustrated with continual cost increases, as well as the need to pass on higher out-ofpocket costs to your employees. After all, benefits are one of the top costs of most businesses and needs to fit within a limited budget.

If you are frustrated, it is both justified and understandable, particularly since insurance company profits have reached new highs and are now among America’s top stock picks.

For instance, from 2018: “The S&P Managed Care sector, made up of the largest insurers, has gained more than 1,100 percent during the market’s bull run. That’s more than twice as much as the gains in the biotech sector. The iShares Nasdaq Biotech Index ETF is up about 500 percent during the period.”

https://www.cnbc.com/2018/08/19/health-insurers-are-a-big-winner-during-

long-running-bull-market.html

More recently, Anthem reported a quarterly revenue increase of 16.81% for the 2nd quarter of 2020, and 12-month revenue increase at the time of 17.28%. Not too shabby, but since 2020 was a year where many avoided care because of Covid-19, could it have been a fluke? Nope, their previous year (2018 to 2019) was 13.15%. Wouldn’t we all like our businesses to grow like that, particularly if we

are a mature one. (https://www.macrotrends.net/stocks/charts/ANTM/anthem/revenue) The Kaiser Permanente Foundation recently published their latest results in terms of annual cost increases. Keep in mind that these are all cost increases after plan changes, including deductible, co-pay and out-of-pocket costs for plan members being increased – meaning higher cost and less benefit.

The CBA Solution

CBA of Georgia decided to get ahead of the challenge and has developed a solution to decrease cost volatility and allow the stabilization to provide member health plans an upside in years where there are low claims and protection in bad years.

A series of webinars will be offered over the next several months to provide details, but here are some highlights in terms of its results and benefits: • The model has a 14-year history of delivering average renewals that are 10% below national averages after “good” claim years and 20% lower after “bad” claim years. • A portion of each company’s premium is put into a fund that pays for high claims for members (i.e., employers) participating in the solution. If there is money left in the fund at the end of the year, it is distributed to participating members and those who help make it successful, even companies who have bad claim years. Distributions have been paid out over 75% of the time.

INTEREST RATES MAY BE NEAR ZERO, BUT FEE INCOME DRIVERS FOR YOUR BANK ARE LIMITLESS.

With short-term interest rates near zero, community banks need other avenues to drive revenue. That’s where Fitech can help. Our modern technology makes it simple for your business customers to accept payments, send invoices and manage both their cash flow and business operations with real-time transaction reporting. These value-added services generate non-interest income for your institution and protect your relationship with small business owners—two key objectives in today’s environment. Banks that control how their small businesses get paid, control where the deposits go. Partner with Fitech today to deliver meaningful, personalized service and grow your portfolio.

Contact Tanner Rizenbergs 817-575-7930 | trizenbergs@fitech.com

www.fitech.com Endorsed Partner of the CBAG

• It allows CBA to leverage its considerable membership to aggregate costs and services that best help their health plans operate optimally. • Each plan is underwritten on an individual basis and does not share risk with any other company. The fund, however, dilutes risk for every participating company. • The model includes an employee engagement model that “hand-holds” employees and dependents who need medical care or procedures so they can access the best options and have someone help them decipher interactions with medical provides in ways that enhance their decisions. • An employer can leave the program at the end of any plan year if they desire. However, only two employers in 14 years have done so, both of which had competitive renewals. • From an employee perspective, this operates just like a “normal” health plan that they are used to. • Rates do not change during the year, nor are they agebanded. • The model can be carved out to become an asset for CBA Georgia and participating banks after it reaches certain milestones (to be determined),

Please look for communications from CBA of GA for the webinars that will go more into “how” the program works.

William “Robbie” Burlas Partner - Captive Solutions & Options LLC 404-593-5013 | www.CSOCaptives.com

Exploring health insurance options has never been easier…

In late 2020, CBA launched CBA Wellness Solutions featuring an innovative health insurance program for its community bank members and partners. While only a few months old, the program is already proving to be a game changer for our members by driving down costs and increasing plan flexibility. CBA’s offering will change the way members look at association health care programs forever. For more information, contact John McNair at 770.541.4490.