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| Employee
Benefits |
Self-Funded Health Plan
| As health care cost continues to increase substantially, surveys show that small and mid-size companies are feeling the hardest impact. The factors underlying this trend include the reluctance of small and mid-size companies to implement self-funded health plan options, despite the fact that a self-funded health plan can offer significant advantages, including potential cost savings. Studies have shown that self-funding employers may save up to 25%. |  |
What
is Self-funding ?
Self-funding is where an employer assume full responsiblity for paying
employee health care claims. With a good plan design and a purchase of
a Medical Stop Loss insurance, employers have enjoyed a substantial cost
savings while at the same time limiting their exposure.
Financial
Risks of a Self-Funded Health Plan
A company with a self-funded health plan assumes responsibility for paying
employees’ medical expenses as they are incurred. Stop-loss insurance
is often purchased to protect self-funding companies from high claims
by limiting financial risk. Under fully-insured plans, companies pay fixed
premiums, and the insurance carrier takes responsibility for paying claims.
It is not unusual for small and mid-size companies to perceive that there is significant financial risk related to pursuing a self-funded health plan, particularly in comparison with the predictability and assurance afforded by fully-funded health plans. Yet this risk can be mitigated through strategic self-funded health plan design, opening the door to considerable cost savings for companies of all sizes.
Small and mid-size companies often rely on health care advisers, such as us, to help them design a good self-funded health plan with strategies to lessen financial risk. The Enterprise Group, Inc. works with companies to develop long-term solutions to their health benefit needs. If you would like to learn more about the self-funded plan or to see if it is right for your, please contact us.
Flexibility
of a Self-Funded Health Plan
•Replace
costly benefits that employees don't value with lower-cost benefits that
employees particularly desire.
•Exclude
or limit claims resulting from risky and hazardous activities.
•Implement
care management programs to direct participants toward the most efficacious,
cost-effective medical care.
•Implement
disease management programs that identify employees with chronic conditions
and potentially catastrophic illnesses and help ensure that they are appropriately
treated.
•Provide
coverage for alternative treatment procedures, such as chiropractic services
and acupuncture.
•Reimburse
employees for the cost of activities that promote wellness e.g., fitness
programsa and weight management programs.
More on Health Savings Account and
Flexible Medical Plan