Self-insured health plans are becoming increasing popular in the US as they allow employers to take control of their company’s medical costs and plan decisions. There is a myth that self-insured plans only work or are ideal for large companies. The truth is that any size company, very small or very large, may be a great fit. Self-insured plans, also sometimes known as self-funded plans, mean that the employer assumes the financial risk for providing healthcare to its employees. Self-insured employers pay for each out-of-pocket healthcare claim rather than paying a fixed premium to an insurance carrier.
So, what are the main reasons that employers love self insured plans?
- The employer can customize the insurance plan to meet the specific health care needs of their employees, as opposed to purchasing a ‘one-size-fits-all’ insurance plan
- The employer does not have to pre-pay for coverage, thereby providing for improved cash flow. It’s literally pay as you go healthcare.
- The employer is not subject to conflicting state health insurance regulations/benefit mandates, as self-insured health plans are regulated under federal law (ERISA). Particularly with the regulations that the Affordable Care Act has implemented and will continue to implement, this point is becoming ever more urgent.
- The employer is not subject to state health insurance premium taxes, which are generally 2-3 percent of the premium’s dollar value. Depending on the size of the company, this could translate into a lot of money.
- Adding sherpaa’s network of concierge doctors to a self insured plan only amplifies the savings. Every time our doctors are able to solve a medical concern by preventing an unnecessary and costly ER or doctor visit, money is literally going back into the company. The savings that a self-insured company using sherpaa can see can be up to 70% greater than a company on a fully-insured healthcare plan.
Though self insurance sounds amazing it’s not for every company. Companies with limited financial resources, those with an older workforce, or those with a less than healthy workforce may not be great candidates. The size of the company is less relevant…a company large or small might be a great fit. Our team of insurance experts can analyze the census data from a company of any size to make a determination as to whether self insurance is right for them. We also handle every aspect of the paperwork for self insured plans so the employer has everything taken off of their plate. They only are as involved as they want to be.