What is Our Role?

What is Self-Insurance?

Self-Insurance (or self-funding) is an arrangement in which an employer assumes some, or all, of the risk of the health plan. Instead of paying premiums to an insurance company, the employer pays claims from its own funds to cover the costs of their employees’ healthcare. These funds are put into a trust, with payment taken out as needed to cover any applicable plan expense. Unlike a fully-insured plan the extra profits from these funds are kept to offset future claims, rather than being paid to the insurance company.

What is a Third Party Administrator?

A third party administrator is usually an external professional firm that pays claims and provides administrative services for self-insured benefits plans. These services might entail Utilization Review, Employee Assistance Programs, Workers’ Compensation, or HIPAA and COBRA administration, along with others.

Why choose Self-Insurance?

Self-insurance gives an employer greater flexibility and control over their health benefit plans, as well as opportunities for cost savings. Self-insured companies can tailor their plans to a degree not available through standard insured plans, creating opportunities to improve cash flow, better contain costs, provide better benefits and meet the unique needs of their employees.

Is Self-Funding appropriate for all companies?

The decision to self-fund employee health benefit programs depends on many variables including, but not limited to, number of employees, amount of risk the company is willing to assume and past claim history. Overall, self-funding is a great alternative to the “one size fits all approach to health care.” Companies choose to self fund in large part because they want to provide a better offering of benefits to their employees. Self-funding allows for companies to provide much better coverage than an HMO, thus insuring a wise investment for all parties involved.