Topher Tuesdays

Alternative Funding

Most people would jump at a 7% to 12% reduction in costs for the same product or service. But when that strategy is a partially self-funded medical plan, employers hesitate concerned about their maximum claims liability.

Despite perceived risks – converting from a fully insured to a level or partially self-funded arrangement can be the first step in aggressively managing your overall health care spend. While fully-funded insurance plans are less volatile, the self-funding model is ideal for accessing relevant data and information that can be used to make informed and intelligent cost management decisions.

For organizations with 100 employees or more typical net savings include:

  • 2.5% of premium for avoiding taxes (depending on state)
  • 5.0% of premium avoidance of carrier margin (profit)
  • 2.5% avoidance of ACA pass through taxes (in 2014 and later)
Currently, more than 90 million employees get health insurance through self-funded plans as employers realize the cost savings, plan flexibility and employee satisfaction that can manifest as earlier as one year after implementation. A self-funded insurance plan can include medical, dental, vision, prescription medications and workers’ compensation. #TopherTuesdays