Separating the Fact from Fiction in Self-Funded Plans
Fiction: Most self-funded plans are completely self-funded
Fact: There is no requirement that states you must completely self-fund your plan. In fact, most employers choose other fixed-rate coverage options to help pay for catastrophic claims.
Fiction: Only very large companies can afford self-funding
Fact: The economic advantages of self-funding do not change with the number of employees enrolled in the plan. The key is purchasing the appropriate level of coverage for catastrophic claims, which is referred to as stop-loss or excess-loss insurance. Many smaller companies have found self-funding to be very cost effective and flexible. Regardless of the number of employees enrolled in a self-funded plan, strategies such as utilization management and wellness-related education can be integrated to allow the self-funded concept to yield even greater benefits.
Fiction: Self-funded plans are often rejected by health care providers
Fact: We provide your company with a broad regional and national PPO network. Your employees will have access to providers who regularly accept self-funded plans, and should have no issue finding qualified, in-network providers in every area of care.
Fiction: Self-funding is too much work for the employer
Fact: Giving you access to the information you need to make sure your plan is working efficiently for your company doesn’t mean more work for you. In fact, we handle all of the day-to-day processing of claims and can service all employee inquiries. Additionally, if you want to reevaluate your plan, our team will review your organization and give you a range of options that may be better suited to your changing needs.
Fiction: Self-funded plans are not subject to regulation
Fact: Self-funded plans are subject to the Employee Retirement Income Security Act (ERISA), which was designed by Congress to provide stringent consumer protections. ERISA requires that each benefit transaction follow the coverage provisions outlined in the plan document. Furthermore, HIPAA Privacy, Security, and Portability provisions also apply to self-funded plans.