Self-Funded Health Plans
What is a Self-Funded Health Plan?
Self-funded health plans (also known as Self-insured health plans) have recently become a popular option in the employee benefits industry. Originally, it was only sought after by employers with 500+ employees, but in recent years, smaller employers have opted into self-funded health plans to take advantage of the cost-saving and flexibility benefits that it offers.
When a company decides to self-insure, they forego paying insurance company premiums in return for healthcare and managing their own claims with protection of a stop-loss policy to cover large or catastrophic claims.
Most self-funded health plan strategies can also be coupled with reference based pricing (RBP), which is a cost containment strategy that allows employers to set a pricing cap on what they pay for medical services. RBP provides greater cost transparency, allowing the employer to have more control over healthcare costs.
Our Precision Benefits Group team is well-versed in the strategies and different types of self-funded health plans. We can be a knowledgeable partner in your transition from a fully-insured health plan.
Check out our Guide to Self-Funded Health Plans and contact us to see how a self-funded health plan or level (or hybrid) funded plan could benefit your company!
What is Hybrid-Funding?
Hybrid-funding (or Level-funding) is known as a self-funded health plan on training wheels. It’s a step towards becoming fully self-funded without the full risk and commitment of making that leap. This is an attractive option for employers at approximately 50 employees, but can also be implemented for an employer with as few as five employees.
Claims data is a vital part to any hybrid funded health plan. It allows you to determine your business's claims history, to be able to properly plan a cost containment strategy with your benefit consultant for years ahead.
What are Captives?
A captive is a collection of like-minded midsized employers that come together for the purpose of sharing risk and purchasing power as it relates to healthcare spending. Captive members save money on stop-loss insurance by pooling together and often see a return of premium with favorable claims experience, since each member of the company becomes a part-owner of the captive.
An employer’s participation in a captive also lends itself to sharing costs containment strategies with other members creating smart habits to lower your company’s overall health insurance expenses. Captives are usually selective on which employers can join. Precision Benefits Group is experienced in recommending captive plans for our clients.