Many companies opt for a fully insured health care plan because it is hands free after purchasing. It becomes a transactional purchase versus a long term investment of self-funding that can align with your company’s goals.
With a self-funded plan, there are several benefits including increased financial control, lower costs, and greater flexibility. Although your company still pays a flat rate for fixed costs, claims acquired by employees are paid on a month by month basis. This allows for the employer to review each individual claim billed during any given month to constantly improve the plan to meet the company’s needs.
This provides a more hands-on approach to the health care plan that your company provides its employees. With this being said, a self-funded plan also includes the benefit of effective cost and information management, as well as unlimited access to the health plan information.
Even though these plans provide a significant amount of benefits, they do add more risk when a catastrophic claim is processed. However, this situation can be mitigated through the purchase of stop-loss insurance, which simply puts a cap on the maximum amount a company can spend. The job of a risk manager is to ensure that the total claims at the end of the year is lower than the expected claims. This will result in major savings for the plan the following year.
Although there are many pros and cons to both fully insured and self-funded health care options, the flexibility and cost management provided with self-funded is hard to ignore. The benefits provided can be customized to meet your employees needs and company’s objectives.
Self-funded health care plans is the coverage of the future. It helps your company attract and retain the best employees by providing them with a plan that is tailored to them.
It’s time to find a better health care alternative.