CFO HELPS EMPLOYERS INVEST IN HEALTHIER FUTURES
Money talks, especially if you’re AHRIC Chief Financial Officer Jerry Miron.
When AHRIC began, Jerry said he was lucky if 2-3 CFOs attended his finance committee meetings. But when the partner-owners began to see real savings in their employee healthcare costs, he found he was speaking to packed rooms.
“It’s unusual to not have everyone at a finance committee meeting,” said Jerry. “From the CFOs’ perspective, this is a major component of their organizations, and I am respectful and try to be responsive to meeting their needs.”
TRANSPARENCY & CONTROL
At these meetings, the CFOs review AHRIC’s financial results, actuarial assumptions and premium rate increases. They also talk about plans for the coming year and develop policies around things like annual income allocation, capital contributions and dividends.
While these topics may not sound sexy to a non-CFO, Jerry said they represent the high degree of transparency and control that AHRIC partners enjoy.
EXPERIENCED, DEDICATED EXPERT
The partners also draw on Jerry’s 30-year career as a CFO in the healthcare industry. A trained CPA, he has worked for large medical groups, integrated health systems, academic medical centers and pharmacy benefit management firms.
This experience helps him handle all the financial, administrative, banking aspects of AHRIC’s management – including the work of professionals like auditors and attorneys – so the CFOs don’t have to worry about those tasks.
Jerry’s experience also helps him with another key responsibility: preparing AHRIC’s annual report for the Arizona Department of Insurance. The report includes approximately 15 documents, which the finance committee reviews and approves each year.
“I try to make their lives a lot easier and be organized,” he said.
CAPITAL CONTRIBUTION OPTIONS
For employers considering AHRIC, Jerry helps explain Arizona’s current requirement that the captive maintain about $3.6 million in capital reserves to cover claims. Each new partner contributes a pro-rata amount toward this total, based on how many of their employees participate in the plan.
AHRIC maintains these contributions and invests the money at the direction of the partner-owners. The partners earn any dividends, and get their initial contributions back if they choose to leave AHRIC.
New partners that are concerned about paying the full contribution all at once can choose to make installment payments or start out as partial partners.
Either way, all new partners are able to take advantage of cost efficiencies, share in savings and have a “seat at the table” to influence decision making at AHRIC.
TIME TO RECOUP INVESTMENT
Jerry said CFOs should know that their investment has the potential to pay off quickly. The founding partners received a return in income distribution equal to their capital contributions within 26-28 months.
“The long-term benefits from both a financial and employee perspective will far outweigh them trying to beat the insurance market on their own,” he said.
Jerry points to the fact that AHRIC’s average net premium increase over the last four years has been 1.5%. He said that CFOs see that and immediately contrast that to the price variability they experience with traditional insurance or their own self-funded plan.
“I’m kind of a bean counter at heart,” he said. “At the end of the day, the numbers tell the story for them.”