Self Insurance
Self insurance is the perfect plan for both employers and employees.
Many employers opt to purchase a self-insurance plan over a fully insured plan because it eliminates the added profit margin for the insurance company that is included in the premium of a fully insured plan. The downside to a self-insurance plan is that there is an increased risk of unexpected claims that must be paid for by the company.
Self Insurance Benefits:
Employer Benefits
- Self insurance is beneficial for employers, because they are not subject to certain state requirements, and can get their unused money back at the end of the plan year.
- A self-insured employer can recover some unused money at the end of the year.
- Monthly costs reflect only the expected claims of employees.
Flexibility
- It offers you the flexibility to meet health care challenges, and allows you to manage health care costs more efficiently.
- Customized plans and flexible benefits packages.
- Exempt from some government regulations.
- Exempt from certain taxes and fees.
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Coverage
- You still receive the benefit of a network of providers with contracts that help determine prices.
- Financial protection of claims exceed that amount (stop-loss).
Self Insurance FAQS
Self-funded plans are often more flexible for you as the employer because you may not be subject to certain state requirements and at the end of the plan’s year you can get money back. These plans offer you flexibility and allow you to customize your plans, you only pay for care you used, and allows you to better manage your health care costs.
Step 1: Choose a TPA (third-party administrator) to administer your plan.
Step 2: Estimate your expected claim, that you will incur for the year and budget appropriately.
Final Step: purchase stop loss insurance to cover any large or unexpected claims.
It is critical that you select the right TPA that will vigorously oversee your claims to make sure they are not overpaying for any services. Doing this will guarantee that you have the highest amount of savings possible.
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