Self-insured employers can either administer the claims in-house, or subcontract this service to a third party administrator (TPA). Who administers claims for self-insured group health plans?Ī. This is an insurance contract between the stop-loss carrier and the employer, and is not deemed to be a health insurance policy covering individual plan participants. While the largest employers have sufficient financial reserves to cover virtually any amount of health care costs, most self-insured employers purchase what is known as stop-loss insurance to reimburse them for claims above a specified dollar level. Can self-insured employers protect themselves against unpredicted or catastrophic claims?Ī. It should be noted, however, that there are companies with as few as 25 employees that do maintain viable self-insured health plans. Therefore, small employers and other employers with poor cash flow may find that self-insurance is not a viable option. Since a self-insured employer assumes the risk for paying the health care claim costs for its employees, it must have the financial resources (cash flow) to meet this obligation, which can be unpredictable.
Is self-insurance the best option for every employer?Ī.
WWW THEHEALTHPLAN COM PROVIDERS US SERVICECENTER CFM FREE
The employer is free to contract with the providers or provider network best suited to meet the health care needs of its employees.The employer is not subject to state health insurance premium taxes, which are generally 2-3 percent of the premium's dollar value.The employer is not subject to conflicting state health insurance regulations/benefit mandates, as self-insured health plans are regulated under federal law (ERISA).The employer does not have to pre-pay for coverage, thereby providing for improved cash flow.The employer maintains control over the health plan reserves, enabling maximization of interest income - income that would be otherwise generated by an insurance carrier through the investment of premium dollars.The employer can customize the plan to meet the specific health care needs of its workforce, as opposed to purchasing a 'one-size-fits-all' insurance policy.The following are the most common reasons: There are several reasons why employers choose the self-insurance option. Why do employers self fund their health plans?Ī. This represents 33% of the 150 million total participants in private employment-based plans nationwide.
According to a 2000 report by the Employee Benefit Research Institute (EBRI), approximately 50 million workers and their dependents receive benefits through self-insured group health plans sponsored by their employers. How many people receive coverage through self-insured health plans?Ī. Typically, a self-insured employer will set up a special trust fund to earmark money (corporate and employee contributions) to pay incurred claims. In practical terms, self-insured employers pay for each out of pocket claim as they are incurred instead of paying a fixed premium to an insurance carrier, which is known as a fully-insured plan. A self-insured group health plan (or a 'self-funded' plan as it is also called) is one in which the employer assumes the financial risk for providing health care benefits to its employees.
0 kommentar(er)
