Who Should Consider Self-Funding?
Companies that… Are financially sound Believe they are healthier than average company Know of no critical or serious ongoing health conditions Get trend increases despite good health history
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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 …
Who administers all these details?
The vast majority of self-funded employee benefit plans use professional Third Party Administration (TPA) firms. “TPA” is another word that gets over-used, under-used and misused. Most employers & plans want a TPA that has broad knowledge and offers comprehensive services. TPAs’ …
What if we get hit with a few gigantic claims or just a high total dollar level of claims? Is a self-funded employer stuck?
The same question would apply in an insurance arrangement if customers’ claims were larger than money the insurer had on hand to pay for them. The answer is that self-funded plans and insurance companies do the same thing to protect themselves …
Why the success & market dominance?
It is simply business economics. Self-funding usually costs less, because any savings remain with the plan; they’re not kept by an insurance company. Self-funding’s main regulatory law, ERISA, requires strict reporting, so fees paid for administration (traditionally hidden within an insurance …
Why use self funding?
Self-funding is, by far, the largest type of health employee benefits. It sometimes has different marketing names, such as ASO or partially-self-funded, and sometimes the marketing lingo confuses its precise legal status, such as some minimum-premium and experience-rated. However, under …
