Self-Funded Insurance Plans in Washington State
A self-funded or self-insured plan is one in which the employer provides employee insurance through the company’s own funds.
Usually, self-funded insurance is ideal for large companies with 100 or more employees, but there are some situations in which employer group self-funding insurance plans for small business make sense too.
Let’s go over the subject in more detail – learning its advantages, and some key factors which will help you decide whether self-funding insurance is right for you.
Advantages of Self-funded Insurance Plans for Washington Employers
With rising healthcare costs, more and more employers are taking the self-funded route. It’s a smart decision, because self-funded insurance, if viable, provides the following added benefits:
- You can customize the plan to meet the needs of your employees. Normally, when you purchase employer insurance, you buy a plan that covers everyone, and it may not be as flexible as you’d like. In a self-funding plan, you can create the plan from the ground up. Pick the network, deductibles, copays, prescription coverage.
- You have the opportunity to pay less for your health insurance than a fully funded plan.
- Your business won’t be subject to the same taxes as fully funded health insurance plans.
Of course, there are also some disadvantages of choosing self-funding insurance. The biggest, perhaps, is that your health plan expenses can be unpredictable.
Partially-funded insurance plans. With a partially-funded plan, you can get part of your premium back at the end of the year if you have lower claims. This option can work well with small and medium sized businesses.
Stop-loss insurance, which is something most small and medium-size companies purchase to protect themselves from extraordinarily large claims. Stop-loss insurance is a contract between you and the carrier which states that they will pay for claims that cross a specified amount.
Referenced Based Pricing (RBP) is another way employers are trying to lower costs for healthcare. Some self funded plans use referenced based pricing to control what they pay for healthcare claims. RBP is a payment strategy that pays a percentage of a benchmark. These plans have no network and many pay a provider a rate based on Medicare reimbursement rates.
Is a self funded plan right for your business?
We mentioned earlier that more and more employers are switching over to self-funded insurance. However, what are the numbers exactly? How much is ‘more’? According to the Self-Insured Institute of America, a 2000 report by the Employee Benefit Research Institute found that approximately 50 million workers and their dependents receive benefits through self-funded plans.
About McGregor Benefits
We are an independent health insurance agency based in Burlington, WA. We work with over 50 insurance carriers throughout Washington state, and have a team of expert insurance brokers who will make sure your company gets the best plan for your needs.
You can talk to an expert employer group self-funding insurance agent from our team when you’re ready, and they will answer any further questions you have and help you understand the concept better.
Self-funded insurance can be rather complicated, and it can be difficult choosing the right employer group self-funding insurance provider. Our help will make the process seamless and easy for you. When you hire us, our expert brokers will help you prepare the perfect plan. Furthermore, we will organize employee meetings so your workforce is fully aware of their benefits.
Employer Group FAQs
What is a self-funded group health insurance plan?
A self-insured group health plan/self-funded plan is one in which the employer assumes the financial risk for providing health care benefits to its employees. With self-funded plans, unexpected claims can cause the cost to dramatically increase. However, it can be advantageous if employees generate a limited amount of claims, allowing the employer to keep experienced gains.
How does self-funded insurance affect the employee?
The employer gets to design the benefits offered. This includes the network of doctors, what prescriptions and medical services are covered.
What are the risks of partially self-funded health insurance for small businesses?
For the employer the expenses can be unpredictable. For the employee the plans can be clunky as usually there are several third party vendors who each manage a portion of the plan offered.
Employee Benefits Services We Offer
We value personal relationships, affordability, reliability, compliance and simplicity.
Included In Your Employer Group Insurance Plans
Our producers hold enrollment meetings so your employees understand the benefits and take the time to answer all questions and concerns.
Tired of all the paper forms? We offer online benefits, HR onboarding, compliance resources & ACA analytics.
We have helped thousands of employees with claim issues. We understand the claim issue pitfalls, encourage your employees to call us for help and we will call the insurance carrier on their behalf.
The moment we receive your renewal we will analyze the marketplace. We will present options so you can offer affordable benefits that are in line with your company’s expectations