There are two primary reasons behind this. First, self-funded groups are not required to follow every ACA (Affordable Care Act) guideline, which allows the avoidance of federal regulations and fees. Employers also pay individual claims as they occur, rather than paying continuous premiums.
Rather than having to use an already structured plan provided by an HMO, organizations construct a benefits program centered around the specific needs of their employees. Over time TPAs also provide insight and data creating an opportunity for more customization, allowing employers to not overpay for unnecessary coverages.
Being regulated on a national level allows companies to keep the same plan for all employees within the U.S., no matter the State. State fees and regulations are also negated, lessening the overall cost of providing employee benefits.
Account managers provide plan reports; compiling claim activity, health history, and costs. TPAs use these reports to provide insight, allowing plan providers to make well-informed decisions and further customize their healthcare program. Varipro offers this service on a monthly basis, ensuring that any irregularities or overages will be caught — holding the health community to high standards.
By removing unnecessary fees, regulations and coverages employers can avoid heightened health care expenses. Plan providers are “on the hook” for the cost of all employee coverages. However, historical data has shown that in most cases the compiled cost of coverages still equates to be significantly less than traditionally structured plans. A stop-loss policy also protects employers from costs immensely exceeding expectations.
Health Care Laws are always changing at the federal and state level, which tightens an organization’s budget and decreases flexibility. By self-funding, employers provide the right coverage for their employees without having to abide by inconsistent regulations.