- Self-funded employee health benefits are becoming increasingly prevalent as employers seek ways to reduce healthcare expenses, increase plan flexibility, manage risk and tailor plans to what workers really want and need, according to an article at AJMC.com.
- Author Carol Berry says that with organizations’ healthcare expenses poised to jump by almost 7% in 2015, according to PricewaterhouseCoopers’ Health Research Institute, self funding can be an alternative to help a company control how much it spends on employee health benefits, while providing workers with quality healthcare.
- Almost 95% of US companies with at least 5000 employees currently self fund their health benefit plans. But large companies are not the only ones who can benefit. The self-funded market, regulated by the Department of Labor and under the protection of the Employer Retirement Income Security Act, now includes nearly 60% of U.S. employers of all sizes.
The ACA is fueling the proliferation of self funding by adding new costs to fully insured plans and eliminating the risks typically associated with self funding. Many self-funded healthcare plans are exempt from new taxes, fees and restrictions placed on fully insured medical plans by the ACA, Berry writes.
According to Berry, there are many important players in the self-funded community, including stop loss carriers, networks, medical managers, wellness companies, legal counsel, compliance companies, underwriters, audit firms, healthcare systems, brokers, human resource managers and consultants. Selecting the right TPA is a critical addition to the team and is crucial to the success of an employer’s self-funded plan, Berry says.
Bottom line: employers with strong financials and stable work forces should investigate making the move to self funding employee health benefits.