The skyrocketing cost of healthcare has brought an urge among the large employers to look for options in order to develop better strategies to pay for the healthcare of the employees. A fully-insured health insurance plan has become a traditional choice and therefore, employers are choosing self-funded health insurance so that they can create a customized plan and eventually save money.
What is a Self-Funded Health Insurance Plan?
A self-funded health insurance plan is where the employer pays for out of pocket claims as they are incurred, rather than paying a fixed premium amount. Moreover, the self-insured employer also anticipates the financial risk for providing the healthcare benefits to its employees. Employers can retain the ability of paying their insurance based on the claims that are incurred up to the cap for the individual and cap for the self-insured group health plan.
Is a Self-Funded Health Plan Right for my Company?
A self-funded health plan is not the best option for everyone. Though, it definitely makes sense for employers (Companies with 150+ employee size) to explore this vital option. Below are mentioned some points to determine whether the self-funded plan is right for your company:
• Check whether your claims typically run lower than the premiums you pay? It can be determined by analyzing the claim experiences every year.
• Does your company have a young age demographic? The companies with young employees considerably have better claims and could pan out to be a perfect fit for the self-funding health insurance plan.
A self-funded insurance plan helps you to make decisions and also control claims. No matter what route you chose, either a self-funded health insurance plan or the fully insured plan, it becomes significantly important to weigh all the options and their corresponding benefits. There is no one size fit for all when it comes to health insurance. It is also important to have an unbiased insurance partner, expert outside party. With self-funded health insurance plans, a company can easily obtain a company-specific claim reports that can reveal the percentage of claims that are out of network and the cost incurred on emergency room visits. So, this kind of information can provide a direction when it comes to customizing the benefit changes.