Self-Funded Plans

Self-funded plans for your business.

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What is Self-Funding?

For many years, large employers have financed their health insurance programs using the self-funded concept. This has proven to be the most cost-effective way to pay for healthcare costs while offering their employees a comprehensive benefits program.

All About Choice and Flexibility

Employers have the ability to choose from a variety of plan designs to customize the benefits to fit the needs of their employees. Employers are also able to choose a funding option and banking arrangement that best suits their budget and cash flow. Self-funding is all about choice and flexibility. There are two types of Self Funding Arrangements – Level Funded and Traditional Funded.

Level Funded Health Plans

Level Funded health plans, typically used for businesses with 5-100 employees, allow employers to pay a preset level 4-tier premium equivalent which includes fixed costs and the maximum claims fund. Because the employer is pre-funding the claims, any unused claims fund at the end of the contract period will be returned to the employer as savings.

Traditional Funded Health Plans

Traditional Funded health plans, typically used for businesses with 100+ employees, give the employer more flexibility with cash flow since only fixed costs are invoiced monthly and claims are funded as they occur. Since the employer is not pre-funding their claims they are retaining the savings throughout the year.

Why Choose Self-Funding?

Employers are drawn to self-funding because of the promise it holds to curtail costs, the freedom it provides to customize plans and the desire to be unburdened by strict regulation. Regardless of whether or not you choose to move to a self-funded insurance option, it’s worth exploring this funding alternative so you can make the right decision for your business.

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