Is your group Health plan premiums Increasing? I have a solution! Employers - A solution to escalating group health insurance premiums! Please Read..... Escalating health care costs in recent years have made it increasingly difficult for employers to provide health insurance benefits to their employees at a reasonable cost. As a result, employers have sought alternative ways and means to keep the costs of their benefit programs under control. Some have opted to drastically reduce benefits, others have chosen to change insurance carriers frequently, utilizing whichever insurance company happens to have competitive rates at that particular time. Both of these can have a negative effect on employees, and is certainly only a short term solution to cost control. Further, it is especially frustrating for employers whose claim utilization is ordinarily low compared to insurance premiums paid. This employer usually heavily subsidizes an insurance risk pool whose loss ratio is much higher than its own. Although Self Funding is often construed as being too risky, a properly designed program actually contains more risk protection than traditional insurance programs; at the same time affording increased flexibility in plan design/administration and improved claims service to the employees. As more and more employers understand this funding method, many have left the days of paying high insurance premiums and found themselves saving hundreds of thousands of dollars while achieving much greater control over this incredibly large expense. Main Objectives Of Self Funding: 1. Flexibility of plan design 2. Flexibility of funding 3. Elimination or reduction of premium taxes 4. Elimination of excess margin & profit of insurance companies 5. Elimination of insurance company deficit recapture 6. Reduced administrative costs 7. Improved administrative services 8. Improved employee morale because of personalized and timely administration Stop-Loss Insurance: Under a self-funded plan, employee health claims are paid directly by the employer or through a trust. However, the employer or trust is subject to the risk of large individual claims, or high incidence of claims on the whole group in aggregate. Proper design of the self-funded program includes special coverage known as Stop-Loss Insurance to protect the plan from these catastrophic claims situations. There are basically two types of Stop-Loss Insurance that can work together or independently, Specific Stoploss, and Aggregate Stoploss. Claims: Under a traditional fully insured plan, the employer pays a monthly premium to the insurance company to cover all costs associated with the plan (claims, administration, risk, reserves, taxes, etc.). Under a self funded benefit plan, the employer only funds health claims as they are incurred by the employees and their dependents. The most significant difference being that while claims experience remains favorable, excess margins built into the insurance premiums are eliminated. In the event of poor claims experience, the plan uses its stoploss insurance coverage to control those costs. Many self-funded plans have instituted claims management services (POPs, Large Case Management, Precertification, etc.) to try to keep the claim costs under their plan to a minimum. These services have proven to be very effective and because you are paying the claims, the savings are reflected back into the plan to prevent increasing the cost to employees and/or reducing benefits. Give me a call to get your business onto this Self Funded Plan today! 307-655-8001
Posted on: Fri, 23 Aug 2013 03:27:39 +0000
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