If you are an employer struggling with the high costs of a traditional Kaiser or Blue Cross plan, there may be an alternative for you. If you have at least 20 – 25 employees, you may benefit to moving to either a self funded or partially self funded Health Insurance plans. First of all, these plans are not for every company. Some are not suited for it. But the ones that are, mostly love it. The concept is to “forecast” what the claims might be for groups and then using a forward thinking concept called Level Funding, they project the next 12 months for the monthly premium. If the group has less than expected claims, they get a fairly hefty refund, if they go over the forecast, they don’t owe anything. The next year’s renewal may reflect some of that, but not as much as you might think.
Self Funded and Partially Self Health Insurance plans
When the plan you select is a partially self funded plan, it acts like a hybrid between a fully insured plan like a Kaiser or Blue Cross plan, but rewards companies for less utilization of the insurance. Other subjects come into play like Wellness plans, Bio-metric checks and incentives for yearly checkups. All of these can affect the next year’s renewal. They say that about 80% of the companies that go onto one of these Alternative Health Insurance plans stay on the plan for many years. The upside far outweighs the downside, in most cases.
Rewards are multiple for companies that choose Self Funded Plans
The Self Funded Health Insurance plans and the Partially Self Funded plans, to the employee, look and feel just like a normal Health Insurance Plan. The difference is on the backside where the carrier and the company work together to achieve more success in bending the cost curve and affecting change with their Health Insurance usage and premiums.