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What impact will health reform have on Self-Funding compared to Insurance?

Health Reform attacked and limited insurance companies in many ways. Which insurance companies remain in the market, what markets or offerings they may drop, and the impact on their prices remains uncertain and could change suddenly.

Charges of excessive insurance company profits and lack of transparency was a main target of the law. As described above, self-funding has no “profits”. Any unused money or savings remain to pay future bills. Also as noted above, ERISA regulations & fiduciary duty have always required the most expansive transparency & reporting of any law. Therefore, self-funded plans are comparatively unscathed by health reform, and can thus continue to offer employers and plans the cost-effective, much-desired flexibility of plan design.

As state exchanges and federal rules about plan requirements evolve over the coming years, insurance company plans are expected to become more and more dictated and standardized. As a result, self-funding becomes more and more the last bastion for custom-designed, most-bang-for-the-buck employee benefits.

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