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Self-Funded Benefit Plans

A self-funded, or self-insured plan, can provide you with the flexibility to design a benefit plan suitable to your organization.

The Basics of Self-Funding:

In a self-funded plan, the employer assumes the financial risk for providing healthcare benefits to employees. As a result, self-insured employers pay for claims as they are presented instead of paying a pre-determined premium to an insurance carrier with a fully-insured plan. When properly administered, employees will see little difference between a fully-insured plan and a self-funded one.

Benefits of Self-Funding:

By self-funding with a third party administrator, employers have the opportunity to reduce administrative costs, increase flexibility and expand the services offered to employees. Some additional benefits of self-funding include:

  • Access to national and local provider networks
  • Good claims experience provides an opportunity for savings
  • Freedom to design unique benefit plan specific to your needs
  • Clear cost justification and documentation through improved reporting

Self-Funding & Healthcare Reform:

The graph below illustrates the anticipated affects of healthcare reform over the next 3 years for a self-funded versus fully insured plan. (Assumes a 25% per year increase for a fully-insured program and a 12% per year increase for the self-funded program.)

 

Fully Insured

Self-Funded

Minimum Loss Ratios
Restrictive Minimum Essential Coverage
Increased Federal Taxes
Risk Pools

Y
Y
Y
Y

N
N
N
N

 

self-funded-vs-fully-insured

Is Self-Funding Right for You?

If you have 25 or more employees, a stable and/or growing employee base, you may be a good candidate for self-funding.

To find out if you should self-fund, contact EBSO or talk to your broker today.

 

Self-Funding Works

The advantages of self-funding in less than 2 minutes. Watch our short video today!

self funding works video