Navigating today’s healthcare landscape is complicated – but managing a benefits plan doesn’t have to be.
We believe that well-managed, self-funded plans are the most economical option for most groups. And just as important, self-funded plans offer more flexibility, control, and responsiveness to employers and members. So everyone gets the plan, and the coverage, that they need. Our approach works. Committed to client satisfaction and superior service, we have been rewarded with high levels of customer approval.
How Self-Funded Plans Work
Self-funded plans offer most companies a way to save money on their benefits plans – while providing healthcare and customer service to employees that is just as good, or better, than they would receive in a traditional fully insured plan. In a traditional fully insured plan, employers pay one set premium to a traditional insurance carrier. The premium covers administration costs and projected claims costs. The insurance company underwrites the risk. If your claims cost for the year is much higher than anticipated, the insurance company covers it, but you will receive a large rate increase the following year. But if your claims costs for the year are lower than anticipated, that extra money isn’t yours – it goes to the insurance company as profit. And, you still may receive a large rate increase the following year, depending on how the carrier’s pool of other plans fared.
In a self-funded plan, employers take on the risk – and the potential rewards – of providing healthcare benefits to their employees. If claims payments run much lower than projected, the extra funds in the claims fund are the employer’s to keep. And even if claims are higher than projected, the plan is structured to limit the employer’s potential loss.
Our offering of benefit solutions allows us to partner with clients to create customized plans for companies of all sizes.
Employer works with a consultant and/or a TPA to design a plan that serves its specific employee group. They choose their own levels of deductibles and co-pays, as well as other features and coverage they want; they don’t pay for those they don’t select.
Costs are clearly outlined, so there are no surprises. The premium includes administration expense and stop loss coverage, which pays claims over a pre-determined ceiling, protecting the employer from large losses. Finally, the employer establishes an account to pay claims as they are incurred, allowing for better cash flow. They have full access to claims and utilization data, so they can see exactly how their money is being spent.
The risk to the employer is limited via stop loss insurance. The stop loss policy typically pays individual claims over a pre-determined ceiling and also includes an aggregate policy that pays total claims over a certain threshold. These amounts are set according to the group’s financial resources and willingness to take on risk.
Plan is typically run by a TPA, which processes and pays claims, provides customer service to employees, works with provider networks, and handles other tasks that would otherwise be performed by a carrier or the employer itself.
Self-insured plans are exempt from certain Affordable Care Act regulations. For instance, these plans do not have to pay premium taxes which can add 2 to 4 percent to total costs. Additionally, because self-funded plans are governed by the Employee Retirement Income and Security Act (ERISA), they aren’t subject to state coverage mandates. Employers can offer the same benefits to all employees, no matter where they live.
Specialty and ancillary services do more than enhance your benefit package. And HealthFirst partners with many of the leading providers of these services. We work with clients to identify the suite of options that fit the employer’s need. For companies intent on retaining their employees and recruiting key talent, robust ancillary benefits packages help make a company more attractive.
Working with partners who we’ve identified as the best in the business, we can provide turnkey solutions that include:
- Vision plans
- Dental plans (see "self-funded dental plans)
- Life and AD&D coverage
- Flexible spending accounts (FSAs)
- Health savings accounts (HSAs)
- Health Reimbursement arrangements (HRAs)
- COBRA administration
If clients have a vendor of choice, we can partner and work with them to achieve their goals.