Employers looking to save money on their health insurance expenditures need to consider the type of health plan they currently offer, and how their health plan is structured. There are two common ways to structure a group health insurance plan: fully insured and self-funded (or partially self-insured).
So, what’s the difference between a fully-insured and self-insured health plan?
FULLY-INSURED VS. SELF-FUNDED HEALTH PLANS
A fully-insured health plan is the more traditional way to structure an employer-sponsored health plan. With a fully-insured health plan:
- The company pays a premium to the insurance carrier.
- The premium rates are fixed for a year, based on the number of employees enrolled in the plan each month.
- The monthly premium only changes during the year if the number of enrolled employees in the plan changes.
- The insurance carrier collects the premiums and pays the health care claims based on the coverage benefits outlined in the policy.
- Employees (and their dependents) are responsible to pay any deductible amounts or co-payments required for services under the policy.
With a self-funded health plan, employers operate their own health plan as opposed to purchasing a fully-insured plan from an insurance carrier. Employers choose to self-insure partially with stop-loss limits because it allows them to save the profit margin that an insurance company adds to its premium for a fully-insured plan. With a self-funded health plan:
- The fixed costs include administrative fees, any stop-loss premiums, and any other set fees charged per employee. These costs are billed monthly by a TPA (third party administrator) and are charged based on plan enrollment.
- The costs include payment of health care claims up to a set limit that you choose. These costs vary from month to month based on the actual healthcare used by employees and dependents.
MY COMPANY ALREADY HAS A SELF-FUNDED INSURANCE PROGRAM. WHY SHOULD WE CHOOSE YOU?
Our health insurance programs are built around you. With a self-funded approach, you choose the benefits and the extras. You’ll have control without the restrictions, because your plan doesn’t need to adhere to many of the state mandates. This gives you the flexibility to create a plan that’s perfect for your company. You’ll have a dedicated team to implement your health plan, handle claims and help you initiate cost-reduction strategies. We have built an unsurpassed network of health care providers and technology partners to deliver innovative self-funded healthcare plans to do what is right for you and your company.
- Consultative and Strategic Plan Design Analysis
- Renewal Pricing Evaluation and Plan Cost Forecasting
- Medical Stop Loss, IBNR, and Reserve Calculations
- Health Care Cost-Containment Strategies
- Medical Claims Analysis
- Patient Advocacy with Case Management
- Health Care Claims Auditing Solutions
- Employee Webinars, Alerts, and Quarterly Newsletters
- Innovative Technology Solutions
- Wellness Program Implementation
- On-Site Medical Care
- Prescription Drug Management