Groups have a few options when considering a self-funded product for their health plan. A self-funded healthcare plan is one in which the employer is financially responsible for part or all of the healthcare expenses of its employees. This means that the employer pays directly for any claims submitted by the people on their plan instead of paying a fixed premium to an insurance carrier.
Why consider self-funding?
In short, you have more control, lower taxes, improved cash flow, less regulations, and plan flexibility with a self-funded plan.
Increased Financial Control
With self-funded plans, employers have the advantage of using their money for funding claims only when they are due rather than continually funding an insurance company through premium payments. This allows the employer to have greater control over funds that would otherwise be held by their insurance carrier in various reserves, such as unreported claims and pending claims.
By funding claims directly, an employer avoids the insurers’ costs of claim reserves, administrative costs, profit margin, risk charges, premium taxes, and contingency margins—basically, you're cutting out the middleman and likely saving money because of it.
Self-funded plans allow employers ultimate flexibility in designing their own health benefit plan. Because self-funded plans are exempt from state insurance laws, employers have more control over where their claim dollars are being spent as opposed to insurance carriers who are tied to a variety of laws and restrictions. This allows employers to pick and choose plan options based upon their values, budget, and strategic planning objectives.
Utilization and Plan Management
The design flexibility and ongoing expense analysis of self-funded plans allows employers to continuously make the plan design changes that they need in order to manage their costs effectively. Self-funded plan designs can even include strategies to monitor use and assure appropriateness of care for inpatient and outpatient services, all while maintaining the benefit of discounts from a variety of network partners.
In a self-funded plan, employers have secured access to all of the information needed to manage their plan effectively. Authorized individuals will have access to confidential monthly reports and benefit-related information and insured clients will have access to their eligibility, claims, and reporting system through our encrypted website. This allows employers to have greater time control and use of their plan's data.
I'm convinced. Now what?
If you're interested in a self-funded plan and ready to take the next step, we encourage you to contact Pro-Claim Plus, PHP's TPA subsidiary, to get started on creating a customized health plan just for you. Why Pro-Claim Plus you ask? Here are just a few reasons:
- We're an experienced third party administrator with local market knowledge.
- We represent three primary roles: design, communication, and service.
- You'll have access to a dedicated account manager.
- We offer convenient walk-in customer service.
- Top-notch claims administration is included.
- We offer a contracted utilization review and medical management cost savings programs.
- We are technology, HIPAA, and compliance-driven.
- We are a value-added service.
- Our clients have access to experienced sales management and service-oriented, exceptional claim payment operations through our TPA services.
- All of our clients receive guidance on their compliance demands regarding their personal health plan activity. Also, actuarial resources are available to provide specific guidance on statistical data.
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