Ready to Upset the Status Quo?
More employers are switching to self-funded health plans than ever before.
For the unfamiliar, self-funding, or self-insuring, means never having to again blindly pay monthly insurance premiums and, instead, turning to a line-up of health care providers and others that are part of a network or that contract directly with the employer.
Self-funding is an unbundled, cut-out-the-middleman approach that more companies are taking every day to curb runaway healthcare spending and improve patient outcomes. In fact, more Americans already are covered by self-insured health plans (67% in 2020, according to the latest estimate) than through conventional employer plans.
Determining whether it makes sense to self-fund (or not) will require a review and analysis of historical claims data and a close look at the health of your employee population, to project future costs.
As critically, you’ll want to dig into the question of how much cash flow you’ll need to set aside for claims. It’s important to establish a cash-flow strategy with your benefits broker and their actuarial partners to ensure your claims reserve always has an adequate surplus.
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Video: The Important Role of Stop-Loss Insurance in Self-Funded Health Plans
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