Background/Overview How Insurance Services and Products Can Be Acquired

2. Background/Overview How Insurance Services and Products Can Be Acquired • Two Methods for Acquiring Insurance • Individually utilizing complex public procurement rules via an RFP process • Join insurance pool and have pool acquire on your behalf • There are currently 23 insurance pools operating in Arizona • An insurance pool may purchase using the RFP process • An insurance pool is exempt from the procurement rules when formed under • ARS 11-952.01(F) and has more flexibility when they acquire insurance services and • products and therefore is able to negotiate more lucrative contracts for its members • Continuous negotiations on price and services • Continuous evaluation of performance • Able to enter into long term contracts/relationships • Eliminates protests and unintended bid rejections • Reduced administrative costs • Pools also offer the advantage of more negotiating power due to aggregation of members

3. Background/Overview How Insurance Services and Products Can Be Acquired • An insurance pool can be created by forming by a intergovernmental agreement (IGA) with no other • purpose than to save districts money through the group purchasing of services. The concept is simple – • you should get better pricing and broader services as a group than you can individually. • The insurance pool may be formed under ARS 11-952, 11-952.01,15-382 and would be specifically • exempt from procurement law by Arizona statute. No RFP would be necessary to join. By forming • under these statues the pool itself would be regulated through the Department of Insurance. • An employee benefits pool would not be an insurance carrier or vendor. It is instead a way to purchase • insurance cooperatively. • In addition to being examined by the Department of insurance as with any insurance company, the • pool would also be subject to be independently audited every year.

4. Background/Overview How Insurance Services and Products Can Be Acquired • How can the purchase of health insurance be exempt from the procurement rules? • Arizona law permits two or more public agencies to enter into contracts or agreements • to jointly purchase various types of insurance, and health benefits plan insurance and • related services and to pool retentions of their risks for life insurance, disability, or • health claims made against any public agency within the pool and to do so on • cooperative or contract basis or by the execution of a trust agreement directly by the • agencies or by contracting with a third party. • A.R.S. 11-952.01(F) explicitly provides that any pool established pursuant to this section • is exempt from the provisions of the Arizona Procurement Code when purchasing • insurance, reinsurance or retaining certain consultants and professional services.

5. Background/Overview How Insurance Services and Products Can Be Acquired • Benefits of Self-Insurance within an Health Insurance Pool: • Each insurance pool determines its own benefits, vendors, and plans however it chooses. • Due to purchasing size, a pooled plan may help your district purchase the following services at a • lower cost: Medical (provider network access & claims administration), Pharmacy Benefit Services, • Stop Loss Insurance, Dental, Vision, Life, COBRA, FSA, STD, and other employee benefits for those • participating in the pool. You get the benefits of economies of scale, negotiating power and knowledge • of true costs. • Health insurance pools can be specifically exempt from procurement law by Arizona statute • (ARS 11-952, 11- 952.01, 15-382). • Health insurance pools may contract directly with providers, allowing for best in class vendors, and • preferred pricing. • The pool can be proactive in continually evaluating and negotiating all contracts, at all times. There • are no “bid cycles”. It is similar to a never-ending best and final process.

6. Services Provided by a Health Insurance Pool Coordinate the following Vendors • Nurse Case Management (NCM) • Company Nurse Program • Physical Therapy • Occupational Clinics • Bill Review/Provider Network • Independent Medical Examinations (IME) • Physician Specialists • RX Program

7. Services Provided by a Health Insurance Pool • Compliance, Accounting, Consultation and Administrative Support • Health claims payments and TPA • Pharmacy Benefit Management (PBM) • Utilization management • Disease management • Nationwide Network of Contracted Providers • Comprehensive Online Management System • Online continuous (all year) employee benefits and enrollment system

8. Services Provided by a Health Insurance Pool • Compliance, Accounting, Consultation and Administrative Support (cont’d) • Overall plan administration by the insurance pool • Experience, trend calculation and rate setting • Accounting, billing and support • Summary Plan Documents (SPD’s) • Consultative partner on State and Federal compliance (Health Care Reform) • Complete appeal process management

9. Services Provided by a Health Insurance Pool • Compliance, Accounting, Consultation and Administrative Support (cont’d) • COBRA administration • 403 and 457 compliance • GASB 45 OPEB actuarial audit • FSA administration • Stop Loss insurance and reinsurance • Comprehensive online management system • Coordinate regular periodic claims audits

10. Services Provided by a Health Insurance Pool • Wellness • Wellness programs strategic recommendations; target goals, schedule • committee interaction, communications • Wellness programs that are data driven and targeted to achieve savings and • improved health • Coordinate guest speakers, health classes and other available wellness events • Provide regular health and wellness newsletters and emails for members • Incentive programs and web site • Program utilization evaluation and return on investment analysis

11. Services Provided by a Health Insurance Pool • Reporting and Regulatory • Monthly, Quarterly and Annual Reports needed to analyze the financial and • clinical performance of your plans • Monthly claims experience reports • Quarterly financial statements • Annual clinical management, utilization trends and plan year recommendations • Annual benchmark analysis, industry trend and pool specific • Annual renewal development and recommendations

12. Questions and Discussion Points… • Joining an insurance pool is another cooperative purchasing option available to school districts in the never ending quest to obtain the best value for your purchasing dollar.