This is ridiculous. A self-funded trust is NOT a fully insured contract. Run into too many claims and rates go up. Healthy people drop off and rates go up more until only the sickos are covered. The plan crashes somewhere along the line and the insureds without access to other coverage are stuck without insurance. The plan going out of business is likely not a qualifying event because it isn't a complying plan to begin with.
Carriers and TPAs used to require 100 members to write a self-funded plan. Now, with the craziness in the market, I've seen that down to 2 members (subject to underwriting of course). I've had groups and consequently data on 1,000 - 2,000 member cases. The carriers all said that claims were 100% credible. I ran the regression and found at best a 65% credibility but only when looking at a rolling 2 year period. Looking at a rolling 1 year period claims were only ~ 35% credible with a huge standard deviation. Renewals were basically using the WAG method of estimation backed up by the SWAG method. Present it with a straight face and your client may believe you.
It is unlikely that you have access to the claims data of any plan other than the one you are the current agent on. You cannot tell whether the plan is solid or ready to go down the tubes.
Looking at the link above, Cigna isn't doing anything against it's own best interest. Cigna has an idea of what claims will come from the offered plan. Cigna is also likely separated from liability and perfectly willing to provide administrative services since it isn't on the hook if things go south. Us this for someone who has no other options but don't ever sell it as insurance or a product with guarantees.
Carriers and TPAs used to require 100 members to write a self-funded plan. Now, with the craziness in the market, I've seen that down to 2 members (subject to underwriting of course). I've had groups and consequently data on 1,000 - 2,000 member cases. The carriers all said that claims were 100% credible. I ran the regression and found at best a 65% credibility but only when looking at a rolling 2 year period. Looking at a rolling 1 year period claims were only ~ 35% credible with a huge standard deviation. Renewals were basically using the WAG method of estimation backed up by the SWAG method. Present it with a straight face and your client may believe you.
It is unlikely that you have access to the claims data of any plan other than the one you are the current agent on. You cannot tell whether the plan is solid or ready to go down the tubes.
Looking at the link above, Cigna isn't doing anything against it's own best interest. Cigna has an idea of what claims will come from the offered plan. Cigna is also likely separated from liability and perfectly willing to provide administrative services since it isn't on the hook if things go south. Us this for someone who has no other options but don't ever sell it as insurance or a product with guarantees.
