Self-Funded Healthcare Plans — Six Reasons why they are the Right Choice for your Company.
September 18, 2017 | Tina Pelland1. Self-funded plans represent a competitive option offering substantial savings for employers.
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.
2. Plans can be customized to meet specific company needs.
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.
3. Self-funding is regulated on a federal level and often is exempt from state mandates.
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.
4. Self-funded administration regulates plan reporting that provide insights and influences strategic decisions of employers.
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.
5. Self-funded plans offer a greater sense of financial control for employers.
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.
6. As regulations overseeing fully insured health plan requirements evolve, the advantage of customization attributes of self-funded health benefit plans increases.
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.