Self-Funded Plans
Guarantee cost for insuring employee health plans is the funding mechanism that is most familiar to employers. Although this form of funding works very well for employers with less than 100 employees, it does not generally provide a cost effective method for larger employers. If you have not considered the potential cost reductions present in alternative-funded employee health plans, then only half the available market has been approached for your company.
With health care costs rising 15% to 40% or more each year the alternative financing method provides the possibility of reducing health insurance costs with the safety net of capped liability. Under a fully insured plan, once the premium is paid, the employer does not benefit from good claims experience. In good years, which on average are 70% of the time, the insurance company keeps the unused claims portion of the premium. This means that the insurance company pays out in claims the full amount of the premium collected only 30% of the time. Partially self-funding eliminates these windfall profits for the primary insurance companies.
Since state regulation does not apply to alternative funded health plans, the employer is not constrained by a filed plan that has a fixed benefit structure and no possibility for deviations. As one of the most overlooked methods for controlling employee healthcare costs, alternative funding provides additional cost control through plan design because the employer is free to develop the benefit structure that more closely fits their specific needs.
Our organization works with more than a dozen organizations that specialize in this financing method. Our capabilities extend to designing health plans to optimize both the benefit and financing structures. Contact us if you would like to investigate the potential cost savings of alternative funded employee health plans in greater detail.
Contact
Our offices are located in Chicago IL. However to ensure prompt service and reduce unsolicited spam email you should use the web form email method.If you would like to improve your current efforts to maintain an effective, yet cost contained employee benefits, then contact ....
Mark Singer at: (630) 416-6171