Self Funded Health Insurance Programs

Self Funded Health Insurance Programs: Cost Savings, Tax Deductions, Reinsurance, Third-Party Administrator, Indianapolis Indiana

Russell Benefit Consulting, centrally located in Indianapolis, Indiana, can provide the expert advice and resources you need to establish a Self-Funded Insurance (SFI) program, as opposed to a more-traditional fully-funded group health insurance plan.

While certain risks exist with an SFI program, self-funding has many advantages for mid-size and large companies, including:

• Cost savings - potential to save 5% to 50% vs. fully-funded plans - unused portions of the fund are retained by the employer
  
• Exemption from certain state regulations, premium taxes and benefit requirements
  
• Plan consistency for companies operating in multiple states
  
• Benefits customized to the needs of a specific work force
  
• Costs determined by the company’s claims history, not based on other employers' experiences

When we set up your SFI program, we will help you to:

Self-Funding Makes Economic Sense for 100+ Employees

The Society of Professional Benefit Administrators estimates that up to 65% of American companies that offer health insurance to their employees fund their own plan. The trend has been that almost every company with more than 100 employees has gone to a self-insurance program, and very few have gone back to the more traditional fully funded program.

While there are certain risks involved, self-funding has many advantages, including:

Cost savings - potential to save 5% to 50% vs. fully-funded plans - unused portions of the fund are retained by the employer Exemption from certain state regulations, premium taxes and benefit requirements

Plan consistency for companies operating in multiple states Benefits customized to the needs of a specific work force Costs determined by the company’s claims history, not based on other employers experiences

Self Funded Insurance: Risk Versus Cost

A self-funded, or self-insured, plan allows an employer to assume the financial risk, up to a preset limit, for providing health / medical insurance benefits to its employees. While some large firms retain total risk, paying all employee health-care costs out of pocket, most employers purchase a re-insurance policy to protect the company from excess claims above the plan liability ceiling. 

Re-insurance, also known as Stop Loss Insurance, protects the liquidity of self-funded plans. Employers choose the amount of risk they are willing to retain. Basically, the lower the risk level, the higher the Stop Loss premiums.

Russell Benefits Consulting can help you determine the appropriate risk level for your company based on a number of factors, including:

Self-Funding: Avoid High-Cost Group Pools

The primary benefit of an SFI program is that premium costs are based solely on the medical history of your employees. Carriers usually place all similarly sized groups into a single pool and base the rates for their fully insured plans on the health of the entire pool. Unless your employees have experienced serious health problems, this process usually results in higher premiums than with an SFI plan.

While group health insurance is generally the focus of self-funded programs, other portions of a benefits package can be profitably self-funded, including:

Due to their volatile natures, certain benefits are risks that no employer of any size should undertake on their own, such as:

Self Insurance: Improve Group Health to Reduce Benefit Costs

Self insuring gives employers the freedom to choose a healthcare plan designed to suit the needs of their employee benefits package while it controls the ever-increasing cost of health care.

Self insurance works well when accompanied by some type of wellness program benefit to help reduce the overall health risk of the group, such as:

Professional Assistance to Manage Your SFI Program

A third-party benefit administrator usually manages the plan, relieving the employer of tedious and time-consuming paperwork and compliance issues. Russell Benefits Consulting has close working relationships with professional benefits administrator groups and can match you with the group best suited to meet your needs. Administrator group general responsibilities usually include:

Employee Benefits Administrator Groups

To remove the burden and cost from employers, we also administer these programs. Learn more at Employee Benefits Management / Administration

Learn More About Health / Medical Insurance

Fully-Funded Plans
Health Savings Accounts
Health Reimbursement Accounts
Flexible Spending Accounts