Phase 1 Launch Blueprint for ClearHealth Basic outlines the entity structure, operational model, and early-year financial plan for a transparent, member-funded health coverage system.
🏗️ 1. Entity & Structural Setup
| Layer | Entity | Purpose | Notes |
|---|---|---|---|
| Holding Co. | ClearHealth LLC | Owns brand, technology, and IP | Formed as a Washington or Delaware LLC |
| Health Fund | ClearHealth Basic Member Pool Trust | Holds and disburses member contributions | Legally distinct trust or custodial account for claims funds |
| Administrator | ClearHealth Admin Services LLC | Licensed TPA / service provider | Handles enrollment, claims, eligibility, and member support |
| Reinsurer | Symetra / QBE / HM Insurance | Provides catastrophic stop-loss coverage | Per-member or aggregate stop-loss contract |
| HSA Custodian | Lively / HealthEquity / Fidelity | Manages member HSAs | Members contribute directly; ClearHealth never holds HSA funds |
| Bank & Trust Partner | Cross River / Piermont / Blue Ridge Bank | Custody and claim-float management | Provides fiduciary segregation of member funds |
💡 You control ClearHealth LLC and Admin Services; the member trust holds pooled funds for transparency and legal separation.
⚙️ 2. Operational Flow
Member → enrolls → pays monthly contribution
↓
Funds split into:
- Member Claim Fund (≈ 80 %)
- Admin + Stop-Loss Premium (≈ 20 %)
↓
Member uses telehealth / Cost Plus / direct-care providers
↓
If claim < $50 k → paid from Claim Fund
If claim ≥ $50 k → Stop-Loss reimburses ClearHealth Fund
↓
Year-end surplus → retained for reserves or rebated to members
💰 3. Financial Model (Year 1 Projection)
Assumptions
- 1 000 members (average risk)
- $350 PMPM contribution
- $325 average PMPM medical + admin cost
- 10 % target reserve margin
| Category | PMPM | Annual Total |
|---|---|---|
| Member Contributions | $350 × 1 000 × 12 = $4.2 M | $4 200 000 |
| Expected Claims (80 %) | $280 × 1 000 × 12 = $3.36 M | $3 360 000 |
| Stop-Loss Premium (8 %) | $28 × 1 000 × 12 = $336 k | $336 000 |
| Admin + Tech (8 %) | $28 × 1 000 × 12 = $336 k | $336 000 |
| Operating Margin / Reserves (4 %) | ≈ $168 k | $168 000 |
➡ Projected Year-1 Surplus: ≈ $168 k (4 %) — used for marketing, reserves, or member rebates. ➡ If claims run below expected, surplus rises to 10 – 12 %.
🧾 4. Capital & Regulatory Requirements
| Category | Requirement | Est. Cost |
|---|---|---|
| Initial Capital | Reserve ≈ 2 months of claims + operations | $700 k – $1 M |
| Stop-Loss Premium Deposit | One month upfront | $25 – 50 k |
| Legal & Compliance | Trust docs, TPA filing, contracts, member agreements | $50 – 100 k |
| Tech MVP Build | Member portal + claims ledger API | $100 – 150 k |
➡ Target capital to launch: ≈ $1.0 – 1.3 M (including operational float).
⚖️ 5. Regulatory Path
Step 1 – Operate as a TPA (Non-insurance)
- Register ClearHealth Admin Services LLC as a Third-Party Administrator where required.
- Contract with stop-loss carriers and HSA custodians.
- Handle claims administration and member support for the ClearHealth Fund.
- No insurance license required since the fund is member-owned and fully disclosed.
Step 2 – Member-Funded Health Pool (Non-ERISA)
- Each member joins ClearHealth Basic and contributes monthly to the shared fund.
- Funds are held in trust and used solely for eligible medical claims.
- Stop-loss coverage protects the pool against catastrophic loss.
- Members receive transparent monthly and annual statements of fund usage and reserves.
- Because coverage is individual and portable, ERISA does not apply.
Step 3 – Captive or Health Co-op Formation (After Year 1–2)
- Once claims data and membership stabilize, form a regulated captive (Delaware, Vermont, or Hawaii).
- Captive assumes stop-loss risk and manages investment float.
- Gains long-term control of reinsurance pricing and risk capital.
🌱 6. Growth Model
| Phase | Members | Revenue | Notes |
|---|---|---|---|
| Pilot (6 mo) | 100 – 250 | $100 k – $300 k | Demonstrate loss ratio < 85 % |
| Year 1 | 1 000 | $4.2 M | Add reinsurance partner |
| Year 2 | 3 000 | $12 M | Introduce DPC & wellness add-ons |
| Year 3 + | 10 000 + | $40 M + | Captive conversion + multi-state filings |
🔐 7. Key Partnerships
| Function | Partner Type | Example Providers |
|---|---|---|
| HSA Custodian | Bank / Fintech API | Lively API, Fidelity HSA |
| Reinsurance | Stop-loss carrier | Symetra, QBE, HM |
| TPA Platform | Claims + eligibility | Marpai, Gusto Benefits Infra |
| Pharmacy Pricing | Transparent drug sourcing | Cost Plus Drugs API |
| Telehealth | Virtual care platform | Wheel, SteadyMD |
| Payments | ACH + ledger infrastructure | Unit, Treasury Prime, Stripe Treasury |
🚀 8. Next Steps for Launch
- Form ClearHealth LLC and ClearHealth Admin Services LLC.
- Engage an actuarial partner to model expected claims and stop-loss thresholds.
- Secure reinsurer and bank partner for trust and premium flows.
- Develop MVP tech stack – portal, ledger, Cost Plus API integration.
- Launch pilot cohort (100 – 250 members) and collect claims data.
- Analyze fund performance and optimize pricing.
- Evaluate captive formation after proof of concept.
Summary
ClearHealth Basic is a transparent, member-funded health coverage platform that pairs direct-care pricing with collective risk protection and HSA compatibility. Each member owns their participation directly — there is no employer sponsor and no ERISA plan. ClearHealth Admin Services manages operations and claims on behalf of the membership, while ClearHealth LLC maintains technology, contracts, and reinsurance relationships.