MVP Health Care, Inc. has seen plenty of interest after launching a self-funded insurance option for mid-sized businesses, according to the Schenectady–based insurer’s vice president of corporate affairs. The mid-sized self-funded insurance option, which MVP launched in March under the name SelectSuite, targets companies with between 51 employees and 149 employees. MVP hadn’t previously offered […]
MVP Health Care, Inc. has seen plenty of interest after launching a self-funded insurance option for mid-sized businesses, according to the Schenectady–based insurer’s vice president of corporate affairs.
The mid-sized self-funded insurance option, which MVP launched in March under the name SelectSuite, targets companies with between 51 employees and 149 employees. MVP hadn’t previously offered a self-funded product for companies of that size, although it had helped larger firms self-fund, according to Frank Fanshawe, vice president of corporate affairs at the not-for-profit MVP.
“A lot of businesses are talking about this,” Fanshawe says. “There is significant interest in the market.”
Companies that self-fund their workers’ health insurance pay directly for employees’ covered claims. They typically contract for administrative services like customer service, claims processing, and network management.
MVP will be providing those services under SelectSuite. Mid-sized employers in Central New York and upstate New York
wanted the option to self-fund, Fanshawe says.
“There’s certainly been a demand for this type of product,” he says. “We’re responding to the market demand.”
It’s too early to share the number of companies that have expressed interest in SelectSuite, Fanshawe says. MVP is focusing on trying to teach companies about the benefits of self-insuring — benefits that can include lower costs, he adds.
“There’s a significant focus on wellness and preventive care,” he says. “This self-funded arrangement can present the most direct financial benefit when you talk about the impact [of wellness programs] on the amount that a business spends on self coverage.”
Self-funded plans also will not be subject to a tax on health-insurance premiums that is scheduled to start in 2014 under the 2010 federal health-care reform law, Fanshawe says. And they aren’t subject to a separate New York State Premium Tax.
The New York State Premium Tax is 1.75 percent, according to MVP. The company estimates that its federal health-insurance premium tax will be about 3 percent when it starts in 2014. However, the federal government will levy that tax based partially on market share, so MVP doesn’t know its exact rate, Fanshawe says.
SelectSuite will mirror benefit packages MVP offers through its traditional insurance business. Companies will be able to choose from a variety of plan types, including high-deductible plans.
Mid-sized businesses choosing to self-insure with MVP generally won’t have as many benefit options as larger businesses, according to Fanshawe. If they did, they might be overwhelmed, he says.
“When you get into the large-group segment, those groups tend to seek very specific benefit-design packages,” he says. “The medium groups don’t have the ability to do that. That segment of 51 to 149 employees can’t dedicate the internal resources to developing their own plan.”
MVP plans to charge a flat fee for administering SelectSuite plans. It will charge $55 per employee per month for firms with between 51 employees and 99 employees. It will charge $50 per employee per month for companies with between 100 employees and 149 employees.
Although MVP is aiming SelectSuite at companies with 51 employees to 149 employees, the insurer will work with slightly larger firms who are interested in the product. So if a company with 200 employees felt it didn’t have the manpower to customize its own plan design, it could use SelectSuite, Fanshawe says.
MVP would also consider administering self-funded insurance for businesses with 50 employees or fewer, he says. But firms of that size don’t generally have the financial resources to make that a good option, he adds.
MVP provides fully insured and self-funded health-benefit plans, dental insurance, and ancillary products like flexible-spending accounts in New York, Vermont, and New Hampshire. The company has more than 600,000 members, with 41,000 in Central New York, according to the 2012 Book of Lists. It has 1,800 employees, 65 of which are in Central New York.
The company’s Syracuse office is located at AXA Tower 2 at 120 Madison St. It also has offices in Utica and Endwell.