Hi, I'm Alan freezin, Employee Benefit expert in southern Alberta. This is one of a series of tips to help you get the best value out of your group Benefit Program. This one is designed for larger clients. And it has to do with the accounting models that your group benefit program is set up on the standard way is called a non refund model. Now with a non refund, if there is a surplus at the end of the year, that surplus belongs to the insurer. If there is a deficit well, that deficit is the insurance problem.

So that's how the non refund works. So you're not really at any risk, you pay the premiums and whatever happens happens. At the end of the year, they're going to look at what has occurred, the insurer is going to look at what's occurred to set your rates go forward. But what has happened in the past if you had $50,000 in claims and only $30,000 in premium, that's their problem. But it works the other way. If you had $30,000 In premium and $10,000, in claim that 20,000 surplus belongs to the insurer.

Now if you're a bigger company, you might consider what's called Administrative Services only. With Administrative Services only, you're really a partner more so with the insurer, the administration charge that the insurer charges shrinks down considerably. So if you're if they were anticipating on your non refund basis, that you were going to be at 20% administration or an 80% target loss ratio, or breakeven, maybe on an on an administrative services only basis, that administration is 12% or 10%. So there's an eight to 10% true savings that you can garner. So then if you do that, and my suggestion is follow the the rates that the insurer suggests you will create a surplus if you create a surplus, that surplus belongs to you instead of to the insurer. So there's a lot more latitude in terms of setting the rates, a lot more flexibility.

You can do those funds that are accumulated, there's really no restriction on what they can be used for. Some employers that I've done this with have created some fairly substantial surpluses, and they've used those to fund wellness programs. They've used those to provide other benefits for their employees. Oh, I didn't cover this off at the start. But you know, you might question well, how does this guy think he's an expert? Well, there's three criteria use.

One is the the training and education that the person has to is their experience. And three is whether that they're this piece of business or this type of business is their specialty, or just something they dabble in. So if you check me out on LinkedIn, I think you'll find that I meet those criteria. Anyways, that's my tip. If you want to contact me, please do my name and contact information is on the screen or connect with me on LinkedIn and keep well your health is your most important asset. Thanks much.