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COTTINGHAM & BUTLER HONKAMP KRUEGER & CO, P.C . Cottingham & Butler Introduction . Privately held - established in 1887 Headquarters in Dubuque, IA National provider of employee benefits and risk management solutions – clients in 48 states Over 3,500 customers 450+ employees

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slide1

COTTINGHAM & BUTLER

HONKAMP KRUEGER & CO, P.C.

cottingham butler introduction
Cottingham & Butler Introduction
  • Privately held - established in 1887
  • Headquarters in Dubuque, IA
  • National provider of employee benefits and risk management solutions – clients in 48 states
  • Over 3,500 customers
  • 450+ employees
  • 38thlargest Insurance Broker in U.S.
  • Recognized for excellence
    • “Agency of the Year” National Underwriter
    • “Agency of the Year” Rough Notes Magazine
  • Professional services firm – focused on culture and growing organically
office locations
Office Locations
  • A number of larger offices, with some individual sales offices
  • 95% of businesses outside of Dubuque, IA
  • Clients in 48 states, ranging from Florida to Alaska, Maine to California
why we are different
Why We Are Different

Depth and breadth of capabilities:

  • Property & Casualty Insurance
  • Casualty Claims Administration (TPA)
  • Captives & Programs
  • Safety & Loss Control Consulting Services
  • Employee Benefits Brokerage & Consulting
  • Benefit Claims Administration (TPA)
  • Medical Management Services
  • Wellness & Condition Management Solutions
  • Personal Insurance Services

Relentless focus on outcomes and results

Willing to take risks and be innovative

Provide alternative financing strategies to reduce insurance costs

Exceedingly focused on metrics and analytics to get behind activity and discern the real impact

Constantly pushing ourselves to get better

brokerage expertise accountability
Brokerage Expertise & Accountability

Brokerage

We organize our traditional brokerage sales and service into practices –

Risk Management and Employee Benefits

  • Industry Expertise: Transportation, Tribal Nations, Agribusiness, Construction, Manufacturing

Claims Management

Casualty TPA that handles worker’s compensation & liability claims

  • 99+% Retention Rate

Medical Claims TPA

  • Pay claims for over 250 self-insured clients
  • Over last 3 years, our average increase in cost per employee per year has averaged less than 3% compared to the industry average of 10%

Onsite Clinical Expertise and Wellness Team

Full-time Medical Director, 24 Nurses, and team of Certified Health Coaches

Utilization review, case management, and condition management to over 100,000 individuals.

brokerage expertise accountability1
Brokerage Expertise & Accountability

Safety Consulting

Eight full-time safety professionals

Service provided to our brokerage clients as well as a la carte

Captive & Program Management

Developed four trucking captives, including the largest member-owned group trucking captive, and a heterogeneous captive for non-trucking clients.

Each captive has retention rates in the high 90% range.

today s agenda and presenters
Today’s Agenda and Presenters

Pay As You Go Workers’ Compensation

  • Matt Murray, Risk Management Account Executive

P&C Overview and Risk Management Audit (RMA)

  • Jeff Bair, Risk Management Sales Executive

Benefits Consulting Services and Capabilities

  • Brad Plummer, Jane Mueller & Nicole Pfeiffer, Employee Benefits Vice President/Sales Executives

HealthCheck360°

  • Michael Kelly, Director of HealthCheck360°
what is workers compensation
What Is Workers’ Compensation?

Coverage for an injured worker while in the course and scope of employment.

Mandatory coverage

How is it priced?

  • Each carrier has a different appetite. Pricing can be wildly different from carrier to carrier.
  • An experience modification factor (mod) is applied to each account. In it’s simplest form a rating of an account based on “average”. 1.00 is average; greater than one below average; less than one above average.
  • Carrier can apply discretionary credits/debits, dividends and other pricing tools.
  • Each class code and state has it’s own rate.
critical to success in workers compensation
Critical to Success in Workers’ Compensation

Licensed insurance professionals

Contracts with the key carriers offering pay as you go solutions and significant volume with each carrier today

Knowledge of states and negotiation

  • As mentioned earlier, each state varies significantly on how workers’ compensation is priced.
    • Iowa – State sets rate, carriers can deviate +/- 30%
    • Illinois – Carriers can essentially charge whatever they want.
    • Wisconsin – State sets rate, each carrier has the same premium. Only way to change the premium is a dividend.
    • Minnesota – A loss cost multiplier state. Large variance in what each carrier would have for rates.
why pay as you go
Why Pay as You Go?

Growing trend in companies wanting this option

Payroll companies including ADP, Ceridian and Paychex are offering this as a bundle with the payroll services

If HK is not talking to clients about bundling the services together, one of your competitors may be

why use pay as you go
Pay as you go SolutionWhy Use Pay as You Go?

Current Situation

25% down and 9 equal payments? 10 equals? Potentially monthly if the carrier is willing to offer.

Premium is based off a best “guess” on what the payroll will be for the upcoming year

If the “guess” is not accurate, there is opportunity for significant additional premium or return premium

Cash flow is based off your estimates and available pay plans

No deposit or down payment required for the client

Premium payments are based on actual payroll

Less audit issues due to the premium being calculated “real time”

Improved cash flow

No checks to write or invoices to pay for the insured

Integrates with Infinisource, once the initial set up is complete, the premium is determined when payroll is run automatically

Simply put…a billing option.

what companies fit
What Companies Fit?
  • All companies can fit for the pay as you go option. The following categories have the greatest take up.
    • Under 100 employees
    • Contractors
    • Small businesses with cash flow issues
    • Companies that have had historical workers’ compensation audit issues
  • Will this work for every company?
    • No, each company will still need to be individually reviewed by the insurance carrier to determine if the carrier will released a workers’ compensation quote.
    • If a carrier is setup for Pay as You Go quotes…it can be done.
what insurance carriers offer coverage
What Insurance Carriers Offer Coverage?
  • Many companies you may know…
  • More and more carriers are beginning to offer the option
when should c b get involved
When Should C&B Get Involved?

If a client is interested in the option, C&B will engage and gather the needed information

C&B will obtain competitive workers’ compensation options

Provide Proposal to HK & client

If they elect to go with the HK/C&B, we will immediately bind coverage and start the process of getting the client set up for the automatic payments

Basic data needs to be included by HK in the data file to the pay as you go software

how does the system work
How Does the System Work?

A net rate will be determined and automatically loaded into the system.

The client needs to assign a class code to each employee on initial setup. This is only needed on intake and with any new hires.

Once this is complete, each payroll period will automatically generate the correct premium. An email will be sent to the client, HK and C&B confirming the payment amount.

A fee of $5-$9 will be charged to the client per pay period depending upon premium size.

the workflow
The Workflow
  • Payroll Data file collected with needed info
  • Software Interfaces with PayGO to automatically send payroll data
  • Provides a class code per employee & verifies in Payroll Software
  • Provides new hire / terminated employee info throughout year, needs to verify employees class code.
  • Develops net rate by state & class code
  • Automatically links rates with payroll
  • ACH set up to withdrawal premium per pay period.
  • Negotiates and binds quote with carriers
  • Provides bound quote to PayGo
how do we get this in front of clients
How Do We Get This in Front of Clients?

Ideas for Discussion

  • Introductory mailer, showing the partnership between HK and C&B and ability to offer the payroll services and pay as you go workers’ compensation
  • Quarterly webinars to provide knowledge and benefits of the program to HK clients
  • Follow up by C&B or HK Payroll (to be agreed upon)
getting started
Getting Started

Several of you may have a clients/prospects in mind that this option would work for

C&B would run 2-3 pilot companies through the pay as you go platform

Integrate systems, work kinks out, and get a working knowledge of how the process will go

your resource
Your Resource

Who to contact at C&B for Pay as You Go Workers’ Comp:

Matt Murray| Risk Management Account Executive

563-587-5312 | mmurray@cottinghambutler.com

slide21

Risk Management

-Jeff Bair

risk management practice areas
Risk Management Practice Areas
  • Everything But Trucking and Benefits
    • Manufacturing
    • Construction
    • Food Related Companies
    • Tribal / Casinos
  • Target $100K Premium and Higher
  • Midwest –
    • 2nd Tier Cities – Under the Radar of Large National Brokers
    • Iowa, Wisconsin, Illinois, Minnesota, Indiana, Michigan, South Dakota, Nebraska, Missouri
business model
Business Model
  • <$100K Premium – Price Sensitive
    • 1.) Insurance Program Design
    • 2.) Brokerage Services
  • >$100K Premium – Service Sensitive
    • 1.) Risk Management Program Design
    • 2.) Brokerage Services
    • 3.) Safety Services
    • 4.) Claims Advocacy
    • 5.) Third Party Claims Administration
consulting competencies
Consulting Competencies
  • Insurance Program Design
  • Alternative Risk
    • Captives
    • Large Deductibles
    • Self Insurance
  • Risk Management Services
    • Safety Programming and Consulting
    • Claims Advocacy
  • Third Party Claims Administration
    • Unbundled Claims Administration
consulting competencies1
Consulting Competencies
  • Insurance Program Design
  • Risk Management Assessment
    • Program Design
    • Premium and Coverage Benchmarking
  • Objective –
    • Move away from price and develop conversation around program design
    • Develop consulting relationship rather than price shopping
consulting competencies2
Consulting Competencies
  • Insurance Program Design
  • Risk Management Assessment
    • Program Design
    • Premium and Coverage Benchmarking
    • Market Perception
  • Crazy Stuff
    • Fruit and Vegetable Distributor’s cargo policy excluded Fruits and Vegetables
    • Entire building schedules uninsured
    • Egg Producer Umbrella policy excluded salmonella outbreak
    • Every policy reviewed has had material findings
  • Outcome
    • Properly Designed Program Tailored to Individual Exposure
    • More informed underwriting
    • More Coverage / Less Premium = VALUE
consulting competencies3
Consulting Competencies
  • Alternative Risk
    • Captives
    • Large Deductibles
    • Self Insurance
  • Significant percentage of clients participate in an alternative risk program.
    • Shift from an annual insurance renewal to an annuity corporate finance project.
  • Lower Total Cost of Risk
    • Insurance becomes less expensive as they take more risk.
    • More operational focused since they have skin in the game.
vip personal insurance
VIP - Personal Insurance
  • Unique Needs for VIP’s
    • Large Property Holdings
    • High Values
  • Features
    • Homeowner policy guarantees full replacement cost
    • Sewer and Water Backup to Full limits of the policy.
    • Auto Agreed Value with OEM replacement parts
    • Agreed Value for Jewelry, Furs, Art and other valuables
  • Exclusive access to top 5 affluent personal insurance markets that cater exclusively to affluent clients
    • Pure, AIG Private Client, Chubb, Ace
    • Complete personal assessment – appraisals
  • Private Client Concierge Service
    • Private Client Service Center
    • Confidential
your resource1
Your Resource
  • Who to contact at C&B for Risk Management solutions:
  • Jeffrey Bair| Risk Management Sales Executive
  • 563-587-5138 | jbair@cottinghambutler.com
  • What to expect:
    • Respect that it is your relationship
    • Work hand in hand with you
    • Continued communication with you during process
slide30

Benefits Consulting Services and Capabilities

-Brad Plummer, Jane Mueller, and

Nicole Pfeiffer

example of key account client service team assignment
Example of Key Account Client Service Team Assignment

Krista Sigman

Director of Group & Voluntary Benefits

Phone: (563) 587-5578

Email: ksigman@cottinghambutler.com

Linda Perry

Compliance & Human Resource Specialist

Phone: (563) 587-5149

Email: lperry@cottinghambutler.com

Jane Mueller

Sales Executive

Phone: (563) 587-5263

Cell: (563) 590-4162

Email: jmueller@cottinghambutler.com

Nicole Pfeiffer

Sales Executive

Phone: (563) 587-5208

Cell: (563) 580-3665

Email: npfeifferl@cottinghambutler.com

Christine Storlie, MBA, PHR

Manager of Client Human Resources

Phone: (608) 467-0692

Email: cstorlie@cottinghambutler.com

Julie Harbaugh

PPO Network Utilization Specialist

Phone: (563) 587-5346

Email: jharbaugh@cottinghambutler.com

Kathy Herting

Plan Document Specialist

Phone: (563) 587-5347

Email: kherting@cottinghambutler.com

Craig Herbst, CPA

Senior Business Analyst

Phone: (563) 587-5137

Email: cherbst@cottinghambutler.com

Melanie Kintzle

Benefit Services Unit Manager

Phone: (563) 587-5314

Cell: (563) 581-2917

Email: mkintzle@cottinghambutler.com

Devon Mullner

Benefits Services Representative

Phone: (563) 587-5237

Email: dmullner@cottinghambutler.com

Adam Jensen, JD, CEDS, FLMI

Vice President and Director of Compliance

Phone: (608) 467-5030

Email: ajensen@cottinghambutler.com

Taylor Orton

Benefits Analyst

Phone: (563) 587-5366

Email: torton@cottinghambutler.com

evaluating benefit plans how are we different
Evaluating Benefit Plans: How Are We Different?

Funding Methods – We have expertise in all funding methods: fully insured, split-funded, minimum premium, self-funded. Most brokers specialize in one funding method.

Geographic – We have benefits clients in 30+ states, and Assurex Partners in all 50 states and across the globe. Most brokers concentrate on a small geographic area or one state.

Insurance Carrier Relationships – We place business for thousands of clients annually with 50+ insured medical carriers, 25+ stop loss carriers and 30+ life & disability carriers. Many brokers only have a handful of carriers they work with.

Strategic Approach – Our team uses a proprietary “3 C’s” approach to evaluating benefit cost drivers and creates custom plans for each client based on company culture, recruiting/retention objectives and budgetary goals. Our team of experts provides creative solutions and outside the box ideas that our competitors don’t think of.

Resources – We are truly unique, in that we can provide an integrated “one-stop shop” solution.

what we do that is different and below the surface
What We Do That is Different and Below the Surface…

Many only focus here

  • Cost per Employee
  • Benchmark Plan Design
  • Dependent Eligibility
  • Audit Metrics:
    • Coverage
    • Consumption
    • Cost Sharing
  • Health Care Reform:
    • Implications
    • Exchanges
    • Penalties

But what’s below the surface?

slide34

Our “3 C’s” Framework for Evaluating Benefit Plans (on a High Level)

Coverage

Consumption

Cost Sharing

c b client trend line versus national average
C&B Client Trend Line versus National Average

Since 2007, Cottingham & Butler’s clients have experienced a trend of 2.8% increase in cost per employee per year versus the national average of 7.4%.

6 primary reasons why we perform differently
6 Primary Reasons Why We Perform Differently

We focus on strategic planning for long term cost containment. Most brokers ride the renewal rollercoaster and don’t know how to effectively plan beyond the current year.

We reach all over, not just locally which gives us a bigger view of the healthcare marketplace and offers alternatives that other brokers may not have access to.

We excel with alternative and self-funding arrangements and believe that you should find ways to buy less insurance over time and self-fund the claims that are predictable and controllable.

Most brokers focus on off-the-shelf options and have market limitations. We focus on principles and dig for the details below the surface that provide opportunities for savings.

We provide wellness recommendations and deliver on our ROI estimates.

We focus and deliver on compliance and HR Services making our clients more effective at managing their employees and benefit programs.

differentiators between c b and other brokers
Differentiators Between C&B and Other Brokers
  • Dedicated Employee Benefits Marketing Team with 100+ market relationships & contracts
  • Dedicated Analytics Team (including former BCBS Finance Manager in charge of a 6 state region)
  • ERISA Attorney on staff
  • HR & Compliance Consultants on staff
  • Proprietary TPA and PPO Networks
  • Plan Document specialist
  • Dedicated Non-Medical market and plan specialists
  • ACA Experts on staff
  • 25+ Nurses and 4 Physicians on staff
  • Wellness Consultants and proprietary programming/pricing with Healthcheck360°
  • Transportation Industry Specific Benchmarking
  • Exclusive HRIS/Payroll system capabilities and pricing
client resources you won t get with other brokers
Client Resources You Won’t Get With Other Brokers…
  • 3-Year Strategy Planning Guide
  • Compliance CD & Quarterly Compliance Newsletter
  • Health Plan Intelligence Suite (Reporting/Benchmarking Portal)
  • MyWave HR Resources
  • Plan Source Benefits Portal for Employees
  • Online Benefit Enrollment Suite*
  • Annual Compliance Manual
  • 5500 Filing*
  • Full HR and Compliance Audit Services*
  • Wellness/Benefits Resources on CD
  • Proprietary HealthCheck360° programming/pricing*
  • Transportation Industry Specific Benchmarking
  • Health Care Reform Tool Kit
  • Dependent Eligibility & Spousal Coverage Audits available through SISCO*
  • * Additional fees may apply
risk management for benefits
Risk Management for Benefits

Benefit Compliance Audit

  • Covers H&W benefit plan policies and processes that can put an employer at risk, including the items covered in a DOL H&W plan audit

HR Compliance Audit

  • Covers HR policies and procedures that can put an employer at risk

Employee Handbook Review

  • Includes a review of the handbook with revisions to bring the handbook into compliance with applicable law and desired corporate policies

HIPAA Title II Privacy and Security Consulting

  • PHI mapping, HIPAA findings report, preparation of Privacy and Security policies and procedures, forms, training materials and presentations for staff

Form 5500 Preparation/Delinquent Filer Voluntary Compliance Program

  • Form 5500s, Schedules, and Summary Annual Report (SAR)
  • DFVC: If your client has failed to file, would they prefer a penalty of:
        • $10/day capped at $4,000 max per plan, or
        • $1,100/day with no limit, going back as far as DOL wants

ERISA Wrap-around SPD Preparation

  • Includes creation of Summary Plan Description containing all the ERISA-mandated elements and required health notices
  • Failure to provide SPDs and required notices can lead to fines and lawsuits
  • Hint: fully-insured carriers don’t do this because it’s a Plan Sponsor duty and the certificate booklets they do provide don’t contain the required items
best practices
Best Practices

Compensation Review and Benchmarking

  • Includes job description creation/review, marketing/benchmarking positions
  • Compensation structure analysis and linkage to performance management

Benefit Issue Research & Analysis

Generic Benefit Form Preparation

  • Includes eligibility, enrollment, plan administration, plan amendments

Cafeteria Plan Preparation

  • POP Plan, FSA, Dependent Care, Adoption Assistance
  • COBRA Administration
  • FMLA Administration
vendor partnerships
Vendor Partnerships
  • Insurance Carriers: We work with numerous fully insured carriers, stop loss carriers, and voluntary benefit carriers
  • TPAs: For our self-funded clients we work with a large number of different TPA firms and understand the strength of their customer service and claims adjudication processes
  • PPO Networks: We have strong expertise in knowing network geographic area strengths and we can plug in regional networks for strong local discounts.
examples of details mattering in the real world
Examples of Details Mattering in the Real World

Blue Card Fees

      • C&B engagement uncovered error in Blue Cross service delivery. Client received $550,000 retroactive credit.
  • ACA Risk Management
      • Review of client on-boarding procedures reveals significant gap in ability to effectively demonstrate offering coverage to 95% eligible. Exposure- Over $20 million in fines. Result: Significantly enhanced recordkeeping and on-boarding process.
      • C&B engagement correctly calculates ACA fees saving client $109,000 versus carrier recommended method.
  • Insurance Placement
      • Procurement of two year stop loss contract saves client exposure on seven figure claimant. Result: Cost projections flat.
  • Performance Based Plan Design
      • Client implemented incentive-based plan design features to promote Wellness and Chronic Condition Medical Compliance.
        • Care Plan Compliance Results:
          • Asthmatics 93%
          • Diabetics 73%
          • Hypertensive 87%
        • Costs are Down 7% over past five years, versus 7% compounded growth.
eligibility audits
Eligibility Audits
  • On average, 4 - 8% of dependent spouses and children on employer sponsored benefit plans are not eligible for the medical benefits they receive.
  • The average cost to the employer for each dependent is $3,500 (per year in claims).
  • A Plan with 1,000 covered employees (1,200 dependents) is likely spending between $150,000 - $200,000 per year on members who do not qualify for coverage.
  • The simple fact is that employers can no longer afford to overlook ineligible dependents.
importance of voluntary benefits
Importance of Voluntary Benefits
  • As employers consider their health care and total rewards strategies in light of health care reform, nearly half expect voluntary benefits and services (VBS) to become more important over the next five years jumping to 48% in 2018 from the current 21%.
  • These supplements to core benefits are designed to fill gaps in employees' security, health, wealth accumulation and address unique personal needs.
  • The most prevalent voluntary benefit offerings currently provided by employers include life (94%), vision (84%), disability (80%), dental (80%) and accident (68%) insurance.
  • Additionally, employers are considering adding a number of voluntary benefits over the next two years. The top offerings being considered include critical illness, identity theft and financial counseling.
  • Towers Watson 2013 VBS Survey
additional broker resources
Additional Broker Resources

Educational Employee Benefit Webinar and Seminar Series

HR Communication Portal which includes documents for employers and employees

Employee Benefits Website to share benefit plan information

Benefit Booklet Content and Design Creation

your resources
Your Resources

Contact Jane Mueller & Nicole Pfeiffer with employee benefit prospects:

Jane Mueller | Vice President Employee Benefits

563-587-5263 | jmueller@cottinghambutler.com

Nicole Pfeiffer | Vice President Employee Benefits

563-587-5208 | npfeiffer@cottinghambutler.com

about healthcheck360
About HealthCheck360°

Created in 2007 to change focus of wellness industry to health risk management

Subsidiary of medical management firm HealthCorp

Natural evolution of 20+ years of experience in:

  • Health improvement and behavior change
  • Chronic condition management
  • Managing over 100,000+ employee lives

Proprietary & Confidential

about our client base
About Our Client Base

Average group size – 300 employees

Domiciled in 36 states

Multiple Industries

  • Manufacturing
  • Professional Services
  • Health Care
  • Transportation/ Distribution
1 biometric screenings
1. Biometric Screenings

Proprietary & Confidential

2 proprietary objective scoring system
2. Proprietary Objective Scoring System
  • Our scoring algorithm is directly correlated to present and future cost drivers
  • Balanced across all major cost drivers
  • Transparent to participant
  • Designed to reward positive change across health spectrum
  • Designed to integrate with medical management
  • Easily understood 0-100 scale
  • Developed and reviewed by physicians

Proprietary & Confidential

5 client specific reporting
5. Client Specific Reporting
  • Individual Report
  • Executive & Aggregate Report
  • Claims analysis*
  • Health Coaching Reporting*
  • Risk Migration Analysis
  • Critical Value Reporting
  • Executive Review Presentation
    • Provides synopsis of various reports
    • Identifies key issues
    • Compares company data to industry cohorts

* If applicable

Proprietary & Confidential

importance of participation
Importance of Participation

18% Increase in non-participant costs

HC360 Sample Population Study, N=10262, 2012

Proprietary & Confidential

correlation to health score to claims
Correlation to Health Score to Claims

HC360 Sample Population Study, N=10262, 2012

healthcheck360 case study
HealthCheck360° Case Study

2000 EE manufacturing and distribution company – Significant correlation in high health risk levels and workers compensation expense.

year 1 to year 4 migration
Year 1 to Year 4 Migration

HealthCheck360 Population Study, N=19,301, 2012.

your resource2
Your Resource
  • Who to contact for HealthCheck360°:
  • Michael Kelly | Director of HealthCheck360°
  • 563-587-5186 | Michael.Kelly@healthcheck360.com

www.healthcheck360.com