Self Funding FAQ
What is the difference between self-funded or self-insured health plans and fully insured plan?
With a self-funded health benefit plan, the employer pays healthcare claims directly rather than through an insurance company. Stop-loss insurance protects the employer from any catastrophic loss or large, ongoing individual claims.
What are the advantages of self-funded plans?
Advantages include:
- Significantly lower insurance premiums. In a self-funded plan, claim costs are treated as expenses rather than as insurable risk items. There are no fixed premiums, but rather pay as you go. In a fully insured health plan, your company pays a premium. The premium rates are fixed for a year, and you pay a monthly premium based on the number of employees enrolled in the plan.
- Competitive discounts. A third party administrator can take advantage of discounts from local health care providers.
- Cost-saving adjustments. Data collected by BAS helps the employer keep track of trends, make adjustments and design future benefit plans.
- Less bureaucracy. Unlike fully insured plans, self-funded plans are in effect exempt from state regulation. As a result, self-funded employers can efficiently provide the same coverage to employees in multiple states.
- Fewer taxes and fees. Self-funded plan eliminates the State Premium Tax, the Annual Health Insurance Industry Fee and insurance company profit.
- Customization. Self-funding flexibility allows a plan to be shaped more efficiently for the unique needs of the company.
- Reduction in claims. Employee health and wellness programs improve the health and productivity of employees, which can result in a reduction in claims.
- Higher Level of Integration. An integrated employee health and wellness programs based on prior claims analysis can improve health and productivity of employees, which can result in a reduction in claims.
- More control of future costs. Self-funded employers are less susceptible to hikes in insurance premiums with the ‘pay-as-you-go’ model.
For a deeper understanding of self-funding contact a BAS expert at 800-843-3831.
What is the BAS Competitive Advantage?
- Plan design flexibility
- Pay as you go
- Data claims info and analysis
- Competitive discount with Cigna OAP/Cost Plus Pricing
For a deeper understanding of self-funding contact a BAS expert at 800-843-3831.