Cosmo insurance also has many clients enrolled in self-funded plans, which is a great option for New Jersey businesses. Self-funded plans are administered by the carrier. Other than that, all copays, billings and other benefits are similar to conventional plans. Rates are most often superior with self-funded plans and are not age-banded.

Self-funded insurances pool the entire employee body including all age groups and health conditions. It is therefore most popular amongst small businesses employing a young and healthy employee body with six or more employees. Pooling employees also prevents your premium from skyrocketing due to older and/or unhealthy employees. With ACA provisions premiums have increased overall because carriers must now ensure individuals with pre-existing conditions with expensive procedures and pricy drugs.

The best perk about self-funded plans is their refunded premiums. Yes, you read right! A self-funded carrier will return any excess in premium paid at the end of the year.

This is how it works. Premiums costs are divided into three equal parts. One portion goes toward administrative costs. Another part goes into a claims fund to pay the estimated amount that the insured anticipates to accrue for the group’s health claims over the year. The remaining portion is saved for stop-loss—money set aside for larger claims that are not expected.

As promised, the carrier will return the money that was not used for claims. Generally speaking, an approximate third of the premium is refundable. Statistically, over 50 percent of enrollees in these plans have parts of their premiums refunded to them.

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