Why self-fund?

With the health benefits market changing so much, the costs of different plans can be all over the place. How would you like better, more cost-effective solutions for your clients to choose from?

Every year, most employers dread shopping around for their plan for the next year but they go to their broker and get several quotes, most employers decide on the most inexpensive plan, then the next year the rates raise with renewals and they are back in this vicious cycle repeating it every couple of years. As the employer or broker, it’s hard to feel like you have any control.

“Insurance can cost close to $10,000 per employee per year, so employees cost as much as $1 million a year. Self-Insurance can save 12 percent, or $120,000, which can be used to hire more employees or grow the business.” – Michael Turpin, Insurance executive.

The potential to save money increases from year to year. For employers, self-funding is a no brainer.  With FreedomCare’s unique structure, our plans protect the employer by collecting a monthly rate to cover claims and build a reserve. Over the years, the employer can build up their reserve utilizing our FreedomCaptive. Learn more and increase your control, give FreedomCare a call today.

3 reasons to self-fund health benefits under the ACA

3 reasons to self fund acaSelf-funding controls costs.

Under the ACA, fully insured carriers are facing higher exposure to claims without the ability to include rate adjustment factors for health conditions and demographics. New rules limit the insurance carriers’ ability to charge higher premiums for older, riskier individuals now that certain risk reduction strategies are not allowed. These costs will most likely be passed on to employers and individuals.

Self-funding keeps the employers best interest as the priority.

There are some fixed costs of administering a self-funded healthcare plan, such as claims processing, stop loss premiums and administrative fees. Self-funded employers only pay the direct costs of administering employee claims. If the employee base is relatively healthy, having a self-funded plan can be one of the best ways to manage rising costs. When employers choose to self-fund their health plan, they have access to all claims submitted, including Minimum Essential Coverage (MEC) plans. The claims administrator should be able to provide reports of what claims were paid and when they were paid.

Self-funding is customizable.

The costs of fully insured plans are unpredictable for employers since carriers have control over monitoring employee health and underwriting for risk. With fully insured plans, employers don’t have access to employee health claims which is a significant advantage of self-funded plans.

In conclusion, the ACA has changed the healthcare landscape. But your self-funded client will be better positioned to save on healthcare costs while providing a quality health benefit plan that meets or even exceeds the requirements of the ACA. Take advantage of our experience and quality products, give FreedomCare a call today.