Reinsurance
In most self-funded insurance plans, “reinsurance” is the second largest expense, behind the cost of medical claims. “Reinsurance” is the individual claim (SPEC) and overall expense (AGGREGATE) protection that most self-funded plans purchase from an insurance company to offset large, unexpected costs caused by one or many catastrophic claims.
The premium cost for reinsurance is calculated by insurance companies by examining many factors. However one important factor is the expected savings that the plan’s PPO will produce through its contracts with medical providers. Often, local networks like ECOH are at a disadvantage because we are a small network with a limited service area, so we do not get much attention by reinsurers. As one of its services to our members, ECOH works closely, and exclusively, with two highly rated reinsurers that take their time and expertise to evaluate ECOH’s networks and give full credit to our superior discounts. These carriers also work clsely with ECOH to provide additional savings for patients using ECOHOne and ECOHTwo because those networks typically produce lower cost claims. When given the chance by our members, we work with those reinsurers to provide the quotes for cost of insurance that the members can use to compare with their current insurance carrier. This is a true “win-win” for our member companies. If the quotes provided by ECOH are lower thant he others at renewal time, the member company can choose to purchase from our insurers without paying any commissions or they can use our quotations as leverage to negotiate with their current insurer. Either way lower cost is the result for our members.
Contact Jim Knutson, ECOH’s Executive Director, for more information and assistance. You can reach Jim either by calling 815-316-3901 or emailing him at jimk@ecoh.email
