Healthcare reform initiatives have created more concern among employers about their ability to manage healthcare costs. When factoring in state mandated benefits, state premium taxes, and the risk charges on insured healthcare premiums, many employers are beginning to seriously consider self-funding as an option to help reduce plan costs.
Self-funding can be a highly effective approach for employers to gain greater flexibility in benefit designs and control over their health plan costs. To help secure financial protection against catastrophic claims, many self-funded employers purchase Medical Stop Loss Insurance. With the help of trusted consultants, the employer determines the amount of risk to be insured.
Self-funded employers experience several benefits compared to a traditional, fully-insured benefit program, including:
Stop Loss Insurance protects a self-funded plan in the event of a catastrophic claim. Specific coverage limits the risk for each covered individual, and aggregate coverage limits the risk for the group as a whole. The terms and pricing of the stop loss policy are affected by many factors, including: location, industry, the make-up of the group’s covered population, historical and current claim experience, network, and other solutions that might impact the overall cost of care.
Self-funding is not a good fit for every employer group, regardless of size. We’re here to offer guidance and support if you need us.
The best candidates for self-funding: