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Self-Funded Insurance

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What if there was a way to save money on insurance premiums while still offering the same or even better coverage to your employees? Self-funding can be the solution to growing insurance costs.

  • Smaller employers now have self-funded plans available to them. This segment of self-funded plans is growing rapidly.
  • 47% of employees in firms with 200-999 workers are self-funded according to the 2011 Kaiser Family Foundation Survey of Employer-Sponsored Health Plans.
  • Nearly half of large employers use a self-funded insurance solution to their healthcare plan.

Self-funded insurance is an arrangement where an employer provides health care or disability benefits to employees with his or her own money. Even though these plans are called “self-funded” the employer does not usually assume 100% of the risk. Extreme claims like transplants, leukemia or premature births can be covered by a type of insurance called stop-loss or excess-loss which covers the employer for claims above a predetermined price. In other words, the employer accepts most of the risk, but controls that risk with a stop-loss plan.

If you have a number of employees that are young and healthy, it doesn’t make sense to pay a one-size-fits-all premium.

Changing from an insurance program that is the same for every employee to a self-funded plan can make a big difference. Joseph Berardo, Jr., CEO of MagnaCare said in an interview with Inc Magazine, "Savings can be in the range of 10 to 20 percent.”

Many large and small companies are switching to self-funded insurance programs because it saves them money and allows them to create customized plans. It just makes sense. For more information on how Valued Health Partners can help you save money on your employee benefits, and to see if self funding is right for you, call us today at 1-855-847-5550.

Sources:
http://www.physicianscare.com/content/public/default.aspx?id=330
http://www.shrm.org/hrdisciplines/benefits/Articles/Pages/SelfFunded.aspx
http://ehbs.kff.org/