“Skip the lottery: Bet on yourself.”
– Clark Howard
Since 2006, Employers with fewer than 100 employees on a self insured plan has increased 25%. Over that same period of time, employers with 100-499 employees has increased almost 15%. The trend is for smaller and faster companies that want to retain talent to move to a self-insured model.
A self-insured plan is a funding arrangement in which the employer assumes direct financial responsibility for the costs of enrollees’ medical claims. Rather than paying fixed premiums to an insurance company—which, in turn, assumes the financial risk of paying claims—the employer pays for medical claims out-of-pocket as they are incurred. The fixed costs include administrative fees, any stop-loss premiums, and any other set fees charged per employee. These costs are generally billed monthly by the TPA or carrier handling plan administration, and are charged based on plan enrollment. The variable costs include payment of health care claims. These costs vary from month to month based on health care use by covered persons. To limit risk, some employers use stop-loss or excess-loss insurance which reimburses the employer for claims that exceed a predetermined level.
BenefitCorp consultants specialize in not only self-insurance products but the Vault Plan Captive self-insurance model that give the best risk analytics. Contact a consultant here to get more information on what smart companies are doing.