A Typical Benefits Package
Traditional Group Benefit Plans – these are structured plans purchased entirely through an Insurance Company.
They usually consist of a combination of Life Insurance, Accidental Death & Dismemberment, Dependent Life Insurance, Short Term Disability, Long Term Disability, Extended Health and Dental Coverage. These plans are priced based on the benefits chosen and the experience that your group has encountered with its existing plan over the past few years.

Ultra Competitive Packages
Private Health Services Plans (PHSPs) are relatively new to the business owner and offer an alternative method to providing Medical and Dental benefits to themselves and their employees. Since Medical and Dental services are not insured products but “fee for service” products, we have an ability to remove tem from the Insured Programs and create a benefit package that provides distinct advantages.

1. Cost Savings – self-insured administration fees are significantly less than an insurers’ margin

2. Complete Flexibility – design and use of program is fully customized to meet the specific needs of your business

3. Control of Premium Dollars – unused dollars in your account at year end belong to you

4. Control of Benefit Costs – in the current and future years

5. Employee Management – employees receive benefits from managing the use of their own account

6. Premiums Carry Tax Benefits – employers benefit from 100% tax deductible premiums that they pay for while employee benefits are 100% tax free

PHSPs can be established in one of several ways. There are design options available depending on how you wish to contribute health spending dollars to a plan, which benefits at what amount will be contributed by the employer or how and where employees spend their health premium dollars.

1. Health Spending Account (HSA): funded on a monthly basis the employer determines the annual contribution to each employee, the type of benefits that will be paid, and an option to determine how unused portions of the account will be used

2. Cost Plus Account (Cost-Plus): employers determines which benefits and to what amount will be paid on behalf of the employee. Benefits are paid only as the service is used and administered. Ideal for small business or proprietorships which require a small benefit amount or unlimited usage.

3. Traditional Plan (Traditional): with a PHSP, your existing Medical and Dental plan with an insurer can be mirrored and reduce your costs by 15% or more. Changes to to the structure of a traditional plan are virtually unlimited and are designed to match your usage requirements.

Cost of Basic Requirements
Control of costs is critical to the success an implementation of any plan. The experience of a plan is an important factor in determining a plan premium rate. However, for some benefits, even a single claim can have a significant impact on costs. Pooled Benefits such as Life Insurance, Accidental Death & Dismemberment and Short-Term & Long-Term Disability “pool” the claims to establish an average or more stable premium rate. Experienced Rated Benefits such as Healthcare, Dental Care and Vision are characterized by a high volume of claims and low to moderate dollar claim amounts. There are several key factors to consider when determining the benefits to be incorporated into your desired plan which will have a direct impact on expenditure and your ability to control costs:

Pooled Benefits

Life Insurance – the cost of Life Insurance for your group is directly affected by the size of your group the demographics of your employees and an aging population.

1. Group Size: greater economies of scale are achieved by larger groups as administrative costs are lower

2. Demographics: the age and gender of your group will affect your rates. As your group ages, premiums will increase. A higher ratio of male to female individuals in your group may also increase the rate.

3. Aging Population: an aging population in Canada places upward pressure on benefit pricing. The bulk of the working population since 1998 is centered in the 35 – 44 age band. By the year 2011, the bilk of the working population will be in the 50 – 59 age band.

Disability Insurance – the cost of Disability Insurance, like Life Insurance for your group is directly affected by the size of your group the demographics of your employees and an aging population. However, Disability Insurance premiums are also affected by factors such as Incidence, reserves, CPP & WCB Offsets, Occupation and Plan Design.

1. Incidence: the rate at which people become disabled. Disability pricing moves in direct proportion to the number of people that make a claim. Nervous disabilities and stress also contribute to number of claims in this area

2. Reserves: money that must be accumulated to pay for claims of a long-term nature

3. CPP & WCB Offsets: The amount of CPP or WCB that an employee receives will affect the amount of disability insurance that the insurer will pay out. As CPP & WCB benefits increase, the amount of disability the insurer will pay out will decrease.

4. Occupation: premiums for disability insurance fluctuate with the risk assocciated with each job description

5. Plan design: the nature of Disability as well as the length of time that benefits will be paid determine not only the the quality of the program, but will greatly affect the cost

Experience Rated Benefits
Healthcare, Dental care and Vision care are known as Experienced Rated benefits and are driven largely by changes to your group’s demographics, health and dental trend factors and the experience of your group.

1. Demographics: the age of your employees, the ration of males to females and the size of your group will all contribute to the premium determined for your plan

2. Health & Dental Trend Factors: the trends associated with the development of a health plan are overall utilization, inflation and declining coverage of these benefits through provincial plans. These factors are applied to each plan at renewal

3. Your Experience: Your claims experience is determined by comparing the premium you have paid to the claims you have incurred. Incurred claims include those claims actually paid out plus reserves (required by law). The ratio of claims incurred to premium is then compared to the target loss ratio, the ratio at which the insurance company has covered both claims and the cost of administering your policy. As the size of your group increases, so does the target loss ratio.

The extent to which the experience of your group determines your renewal rates depends on the number of employees covered under the plan and the number of years of experience there is to evaluate. This is known as the credibility of your experience. Generally speaking, the larger the size of the group and the greater the number of years of experience there is to evaluate, the higher your credibility. The higher your credibility, the greater reliance the insurance company places on your experience to establish your rates. The remainder of your required premium that is not attributable to your experience is determined by Health and Dental trends and the demographics of your group.

Returns
Health Risk Services provides a number of services that contribute to the efficient execution and proper maintenance of your health benefits program. Our experience and “client first” approach is clearly defined by the following services which are included with each benefits program fro Health Risk Services Inc. throughout the design, administration and maintenance process, many others benefits will result from your decision to choose HRS Inc.

1. Educating both employers and employees to assist in understanding how your program functions, how to use them efficiently and how to be accountable and responsible for the programs that are implemented at your business

2. The adjudication and verification of all claims to ensure that each claim is eligible according to Canada Customs & Revenue guidelines

3. Processing of all Health & Dental claims

4. Provision of all necessary documents and receipts for tax purposes and coordination of benefits

5. To review and manage each program at least once per annum and manage the program to ensure proper functionality

6. To assess and reconfigure each plan so that the best possible usage and best available products are applied to specific needs and requirements of each client