Partially Funded Health Plans (Shared Funding)
Shared Funding Plans allow small employers to take advantages of all the cost saving and benefit design features of a self-insured plan that typically is designed for larger groups. However, any small or large group could benefit greatly by the cost saving opportunities of a shared funding plan.
Here’s how it works.
First, an employer will select any of the fully insured plans that the carrier offers and rates will be determined by the group’s claim history. Stop-loss insurance is added to protect against catastrophic claims.
Just like with an insured plan, the carrier will handle the administration of the plan, processing claims and offering members on-line access to benefit explanations and other reporting tools.
Premiums for shared funding plans are generally much lower than fully insured plans because the employer shares some of the risk.
Employers who opt for shared funding plans may save even more costs by implementing wellness programs into the workplace.
Self-Funded Health Plans
When employers self-fund their own health plan, they will benefit from a significant savings in premiums, increased cash flow, tax advantages in addition to having more control over the benefits that the plan offers.
Although not always a popular choice for small employers, today, self-insured plans are considered to be good options for both small and large employers. Benefaction Insurance Agency, Inc. specializes in helping employers set up and maintain self-funded health plans and would be happy to give you a no cost analysis to determine if a self-funded health plan option is right for your company.
Here’s how it works:
A self-funded health plan requires the employer to become the insurer. Most often, employers will partner with a PPO to provide services for the plan. A third party (a TPA) is engaged to handle claims and processing. Because self-insured employers run the risk of large catastrophic claims, they will purchase stop-loss insurance to protect them in such an event. Even with the additional expense of stop-loss insurance, employers can enjoy saving thousands in premiums and other advantages.