It’s no secret that health care is expensive. Yet providing a comprehensive benefits package to your employees is essential to retention, engagement and the overall health of your company.
So how do you make sure your employees are getting the coverage they need without breaking the bank? Switching to a self-funded healthcare plan can provide major relief from a lot of the costs associated with traditional healthcare plans.
With a self-funded healthcare plan, you fund employee healthcare costs yourself, typically through a designated trust fund. A third party administration would process claims on your behalf.
The main difference between traditional and self-funded healthcare plans? With self-funded plans, you are responsible for paying health care claims, but you have a greater opportunity for customization and savings.
Insurance is how companies that self-fund their healthcare plans protect themselves. Indeed, many traditional insurance companies utilize stop-loss insurance, as well. Stop-loss insurance will help you pay for insurance claims that are above a certain amount, protecting your finances from being wiped out over large healthcare claims.
Healthcare costs are constantly on the rise (employer costs are predicted to rise by 6 percent in 2020 alone). Mitigating these rising costs is how you protect both your employees and your own bottom line.
Premium costs are lower for employers who use self-funded healthcare plans. This is because premiums are only collected with excess loss coverage, meaning your company is not responsible for paying full state premium taxes.
Self-funding allows you to craft a healthcare plan that fits your business and your staff, with no need to adhere to an insurance carrier’s predetermined policies. This is where a lot of cost savings come into play because you have more control over your plan.
A traditional insurance plan is typically rife with extra fees and charges. Working with a qualified insurance consultant to optimize your self-funded plan can help you save up to $400k per 100 insured employees.
With traditional insurance, a business pays its potential healthcare costs in advance via a monthly premium. This is regardless of the number of employee claims. Self-funded insurance means only paying when a claim comes through. This affords you a greater level of control over your company cash flow and gives you more opportunities to save.
Too often people write off self-funded healthcare plans as the territory of enormous corporations, but through strategic planning and stop-loss insurance, both small- and medium-sized businesses can also benefit from this more flexible insurance plan. Begin your switch to a self-funded healthcare plan by starting a conversation with an Employee Engagement Strategist at Netwellth to see what options might best suit your unique business.