Power Up Your Health Plan with
Self-Funded Insurance

Self-funded health plans are a game-changer for employers who want real control over their group health plan. It can be more cost-effective than fully insured plans, since they only pay for actual claims rather than overpaying for unused health coverage that they'll never see again.

What does this look like in practice? Businesses pay for their employees' healthcare expenses as they happen. Simple as that. This offers flexibility to design group health benefit plans that actually work for their workforce. Specifically, they can tailor benefits, manage costs better, and pivot quickly when employees' needs change.

However, self-funded plans also mean they're taking on more financial risk as they are responsible for all claims payments. Before they choose a self-insured health plan, businesses should carefully assess their financial resources and risk tolerance to make sure they can support the plan and their people, even when claims are higher than expected.

Self-funded health plans follow federal law, including ERISA (Employee Retirement Income Security Act), which sets minimum standards and protects both the business and their employees. This helps them stay compliant while also enjoying control over their healthcare costs.

Running a self-funded health plan need real oversight and know-how to make it work. Most employers bring in a third party administrator (TPA) to handle the day-to-day activities, such as processing claim payments, keeping up with compliance headaches, and dealing with all the customer service calls from plan participants. Some companies might think they can handle this internally, but either way, they're the one writing the checks directly for health claims.

This hands-on approach gives them way more control over their health benefits package, but it also means they're taking on bigger risks and more responsibilities than they might realize. A self-funded health plan can absolutely work for organizations that want more flexibility and better cost control, but only if they're ready to tackle the complexities of managing claims, staying compliant with regulations, and keeping up with ongoing plan administration.

What's one of the biggest worries for employers with self-funded insurance? High cost claims that can blow their budget.

What they need is stop-loss insurance. It is a financial backup plan – it kicks in and reimburses them when claims hit a certain dollar amount. They can get it tailored to fit their company's needs. Do they need individual coverage? Done. Or aggregate coverage? That works too. It's really about what makes sense for their situation.

Buying insurance and calling it a day is not effective risk management. They need to watch their claims data like a hawk, tweak their plan design when needed, and work with experienced insurance advisors or TPAs who know what they're doing. The right stop-loss coverage and staying on top of risk management can offer solid health benefits without worrying about their company's financial health taking a hit.