Q&A with the CEO
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Q: Is Partial Self-Funding or Fully Insured Best For Your Company?
A: Fully Insured vs. Self-Funded
In a traditional fully insured health plan, your company pays a
premium. The premium rates are fixed for a year, and you
pay a monthly premium based on the number of employees enrolled
in the plan. Your monthly premium only changes during the
year if the number of enrolled employees in the plan changes.
The insurer collects the premiums and pays the health care
claims based on the benefits in the policy you purchased.
The covered persons are responsible to pay any deductible
amounts or co-payments required for covered services under the
policy.
The cost of a self-funded plan has fixed components similar to
an insurance premium, e.g., administration fees, stop-loss
premium, and variable costs (the claims expense). The
administrative fees, stop-loss premiums, and any other set fees
charged per employee are referred to as fixed costs and are
billed monthly based on plan enrollment just like an insurance
premium. The employer sponsoring a self-funded plan also
pays the claims costs incurred by the covered persons enrolled
in the plan, and this cost varies from month to month based on
health care use by the covered persons. Stop-loss
insurance reimbursements are made if the claims costs exceed the
catastrophic claims levels in the policy. So the total
cost of a self-funded plan is the fixed costs plus the claims
expense less any stop-loss reimbursements.
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Q: Is Partial Self-Funding Too Risky For Your Company?
A: Capping Your Catastrophic Risks
Even though these plans are called partial self-funded plans, an
employer does not assume 100% of the risk for catastrophic
claims. Rather, the employer buys a form of insurance
known as stop-loss or excess-loss insurance to reimburse the
employer for claims that exceed a predetermined level.
This coverage can be purchased to cover catastrophic claims on
one covered person (specific coverage) or to cover claims that
significantly exceed the expected level for the group of covered
persons (aggregate coverage).
Through our MGU’s Actuarial Division Our
organization has a unique expertise and talent we call our
Risk Assessment Survey where we conduct a detailed and accurate
analysis of your past experience to help determine whether your
company is a good candidate to partially self fund or not.
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Q: Is Partial Self-Funding Complicated To Set Up and Difficult To Administer?
A: Implementing Your Plan
The flexibility of partial self-funding helps employers use
their health benefit plans the way they were originally intended
– to attract and retain the finest employees' in the industry.
Benefits can be customized to meet your employees' needs and to
satisfy company objectives. HMA Direct will help you
design your partially self-funded plan and handle the day-to-day
plan administration as well as become a valuable extension of
your Human Resources Department.
Our Administrator has a partially self funded plan called
Doctor’s Choice and through our PPO Network Solution we can
implement a strategy to maximize in network utilization and
ensure that the plan is recognized and accepted by your
employees providers. Consumer-directed health plan options are also compatible with
self-funded plans. For example, we can pair a
high-deductible self-funded health plan with a Health Savings
Account or a Health Reimbursement Arrangement. |
Q: How Many Employees Should I Have To Consider Partial Self Funding?
A: Not just for large Companies
A common but mistaken impression is that partial self-funding is
only for larger employers. In fact, self-funded health
plans can work extremely well for smaller employers as well
providing them with the very best benefits for their employees
while driving down costs. When we set up our Doctor’s
Choice partial self funded plan for a smaller employer, we help
them select the appropriate level of stop-loss or excess-loss
insurance, which provides reimbursement for large catastrophic
claims. Stop-loss insurance allows smaller employers to
consider this very economical approach to providing employee
health benefits because it protects them from large claims.
Additionally, our world class Administrator has a bundled
package of services to make the entire experience an enjoyable
one.
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Q: Is Partial Self-Funding The Right Thing For Your Company?
A: Risk Assessment Survey
The only way to know if your organization can benefit from self-funding is to analyze
your existing plan design and overall Actuarial risk factor.
Our MGU’s Actuarial division provides this analysis with a process we call our Risk Assessment Survey for a
minimal cost to you and without obligation. Isn’t it time
you learned more about partial self-funding with our Doctor’s
Choice Health Plan?
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