Self-Funding Alternatives & Cost Containment Strategies
We have found that employers in all industries are struggling with the same problem, controlling health care costs!
There was a time when self-funding your health care benefits was only for large companies. Those times have changed and given the current economic environment many companies with 50 or more employees are turning to this effective cost containment solution. It provides a way to pay only for actual claims, with full protection while providing detailed reporting to analyze employee behavior and plan flexibility to adjust options.
Benefits of Self Insuring to Control Health Care Costs
- Gain greater cash flow management
- Pay only for claims incurred with additional stop-loss insurance for full protection
- Avoid costly state premium taxes and carrier administrative costs
- Receive and benefit from claims management as well as carrier profit margin
- Standardize benefits across multiple states with no state mandates
- Plan flexibility to accommodate for utilization trends, HR needs and inflation
- Gain complete control of benefit costs with detailed reporting providing a comprehensive view of claims
- Identify and control high risk claims and adjust plans accordingly
- Benefit financially directly from wellness and education programs
- Define exact exposure and maximum cost due to stop loss insurance coverage
- Combine with a CDHP and health & wellness program for maximum result
When you self insure your health care you are taking a proactive approach to cost containment and will benefit from a well designed plan. The best way to keep plan costs in line is to help employees stay healthy and move to a self-funded arrangement. This solution delivers robust reporting for a hands-on experience, full benefit design control and stop-loss protection to limit exposure.
Level Funded Plans
A level funded health plan (also known as a partially self-funded plan) is a hybrid of a fully insured plan and a self-funded plan. It combines the cost savings and customization of self-funding with the financial safety and predictability of a fully insured plan. Under this arrangement employers have the opportunity to benefit from favorable claims experience without the risk of having to pay more if claims run worse than expected.
Under a level funded arrangement employers:
- Pay pre-set level payments (maximum costs) each month regardless of claim activity. Costs do not fluctuate (except to adjust for enrollment shifts).
- Receive detailed reporting and information on all claims. Employers can track exactly how claims dollars are being spent.
- Have increased flexibility in plan structures. You have the ability to select and change your plan based on claims, utilization and employee needs.
- Receive credits for favorable claims without the risk of having to pay for unexpected claims.