How can you contain your healthcare costs without cutting your employees’ benefits?
Self-funded plans are quickly gaining momentum for employer groups of all sizes. According to a Kaiser Family Foundation Study, employer-sponsored insurance plans covered almost 159 million non-elderly people in 2022. Out of those covered workers, 65% were enrolled in a self-funded plan.
By switching to self-funding, you have the potential to modernize your employee benefits and unlock an array of advantages that can lead to greater financial stability, improved flexibility and enhanced employee satisfaction.
What is Self-Funding?
According to the Health Care Administrators Association, a self-funded, or self-insured plan, is:
“One in which the employer assumes the financial risk for providing health care benefits to its employees. In practical terms, self-insured employers pay for claims out-of-pocket as they are presented instead of paying a pre-determined premium to an insurance carrier for a fully-insured plan. Typically, a self-insured employer will set up a special trust fund to earmark money (corporate and employee contributions) to pay incurred claims.”
Unlike traditional fully-insured plans, self-funding empowers employers to directly manage their healthcare expenses, customizing benefit designs to meet the unique needs of their workforce. By assuming the financial risk associated with healthcare claims, employers can optimize cost management, promote transparency and tailor benefits to align with organizational goals and employee preferences.
Benefits of Self-Funding
Take a proactive approach to your healthcare management and start benefiting from self-funding today.
Some benefits of a self-funded plan design are:
1. Plan Flexibility and Customization: Design and customize your health plans to meet the specific needs and challenges of your employee population. Self-funding also allows you to have control over the design and management of prescription drug formularies.
2. Control and Transparency: With access to more of your plan data, you’re able to gain a clear understanding of where your money is going and how it is being spent. This will allow you to adjust and make enhancements moving forward.
3. Cost Savings: Rather than paying the full premium each month, whether the plan is being used or not, you are only paying for when the plan is utilized. Unlike fully-insured plans, any unused funds at the end of the plan year can be retained and saved or reinvested into other employee initiatives.
Work with a self-funding expert at Blue Ocean Benefits and Consulting.
Getting started with a self-funded plan takes careful consideration and planning. There are many details to consider, and it can seem overwhelming. The best place to start is with a benefits consultant.
Our team of experts can do a full evaluation to determine if a self-funded health plan is right for you.