Self-Funded Health Plans from Employee Benefit Solutions
Yes, it’s a fact that recent changes brought by the Affordable Care Act have dramatically altered the healthcare landscape, resulting in an influx of companies to the self-funded market. However, the truth is that self-funded healthcare plans have long been a viable solution for companies seeking to control their healthcare costs. First, it’s a good idea to define exactly what these plans are, and why they are becoming so popular today.
What is a self-funded healthcare plan?
Simply put, a self-funded healthcare plan is a way for employers to create their own medical coverage plan by paying for their own losses up to a certain amount – choosing the features they want, based on their own needs. It’s a recognized risk management tool that many employers can use to their benefit, regardless of the health of the economy.
Self-funded plans can offer:
- Greater savings—the money you collect via employee premiums is paid out only when a claim actually occurs. The savings can be invested in a reserve account, earning interest.
- More flexibility in plan design features—pick and choose the plan features that are most meaningful to your employee population in every phase of life.
- More control—you have freedom from fluctuating prices and coverage availability in traditional markets; the opportunity to set and manage your own program expenses and further trim costs by fostering a culture of workplace safety; predetermine the amount of risk you are comfortable taking on.
- Potential tax benefits—most self-funded plans are exempt from state premium taxes, resulting in a significant cost reduction right off the bat.
- Administrative options—employers can save on traditional overhead costs by relying on Employee Benefit Solutions for third-party administration services (most commonly chosen), or handle those tasks internally.
How does a self-funded plan work?
The employer assumes the risk that is traditionally taken on by an insurance company, essentially acting as the insurer—setting rates and collecting premiums from employees, and paying claims out of pocket from those collected premiums. Premium costs depend on the plan features you select and the number of employees to be covered.
Should claims be lower than anticipated, you keep the difference and can invest and earn interest on those saved dollars. Conversely, if claims are substantially higher than anticipated, a stop-loss insurance policy offers employers a safety net. This coverage protects you by paying claims beyond a set limit—for example, if an employee suffers a catastrophic accident or injury, or an unusually high number of claims occur at the same time. With stop-loss insurance, you can enjoy the flexibility of a self-funded plan while protecting yourself from the risk of unpredictable or disastrous events.
We understand that one size does not fit all.
Because the success of a self-funded plan depends heavily on analysis of the variables specific to each situation, the licensed professionals at Employee Benefit Solutions get to know your operation intimately. We carefully examine statistics such as your company’s prior utilization of coverage, the overall health characteristics of your workforce, and your cash flow. Our analyses are exhaustive because they help us help you forecast future costs, which directly affects the premium rates that your employees are charged and ultimately, the cost of your plan.
What’s more, we make things as smooth and easy as possible. We put together, for your approval, the benefit plan documents and description booklets. We assist in the filing of necessary documents such as Schedule A and the 5500 form, plus provide detailed monthly claim reports. In short, we are your group health care representative and liaison – handling all customer service, determining eligibility, processing and paying claims, selecting and overseeing prescription/ provider networks, and issuing benefit booklets, ID cards, claim forms, etc. to your employees.
Contact us to learn more.
Trust Employee Benefit Solutions to help employers and their employees make the connection between good health and saving on their healthcare plan. Give us a call at (203) 563-0885 to find out more about our solutions.