Groups of 25 or more are eligible to pursue self-funded plans as opposed to traditional group health plans. A self-funded healthcare plan is one in which the employer is financially responsible for part or all of the healthcare expenses of its employees. This means that the employer pays directly for any claims submitted by the people on their plan instead of paying a fixed premium to an insurance carrier.
Why consider self-funding?
In short, you have more control, lower taxes, improved cash flow, less regulations, and plan flexibility with a self-funded plan.
Increased Financial Control
With self-funded plans, employers have the advantage of using their money for funding claims when they are due rather than funding an insurance company through advanced premium payments. You can control your funds that would otherwise be held by your insurance carrier in various reserves, such as unreported claims and pending claims.
By funding claims directly, an employer avoids the insurers’ costs of claim reserves, administrative costs, profit margin, risk charges, premium taxes, and contingency margins—basically, you're cutting out the middleman and likely saving money because of it.
Plan Flexibility
Employers have flexibility in designing their own health benefit plan. Self-funded plans are exempt from state insurance laws, which give employers more control of where their claim dollars are spent. Many benefits incorporated into your plan document are determined by your cost and strategic planning objectives.
Utilization and Plan Management
The design flexibility and ongoing expense analysis of self-funded plans allow employers to make the plan design changes they need in order to manage costs effectively. Self-funded plan designs can include strategies to monitor use and assure appropriateness of care for inpatient and outpatient services, all while utilizing discounted network partners.
Information Management
In a self-funded plan, employers have secured access to all the information needed to manage their plan effectively. Authorized individuals will have access to confidential monthly reports and benefit-related information and insured clients have access to their eligibility, claims, and reporting system through our encrypted website. This allows the clients to have greater time control and functionality for their plan data.
*Monthly payment may be adjusted throughout a contract period if significant changes occur in the number of employees enrolled in the plan.