It goes without saying that, today, in order to not only attract, but also retain the top talents in your company, you will undeniably need to think about what it is precisely that you are offering, and then do your best to improve the offer, in order for it to suit the employee preferences. Among the benefits you will be offering, insurance is, without a doubt, a rather important one on the list. And, most employees won’t even consider working for you if you can’t offer it.
Learn about the types of benefits in general: https://www.forbes.com/advisor/business/employee-benefits/
Anyway, there is no doubt whatsoever that you will need to offer a health plan to your employees. And, of a long time, companies have mostly relied on insurers that have been selling them full-insured health plans for their organization. That may have worked well, as it does have its benefits. Today, though, the truth is that an increasing number of employers is turning towards a different solution.
To cut right to the chase, I am referring to the solution of self-funded insurance plans. Chances are that you have heard the term already, but you may not be completely sure what it entails. Or what the benefits of using those to your advantage actually are. What we are going to do right now, thus, is answer those questions for you below, in an effort to help you what you need to know about this particular solution and its benefits.
So, What Is Self-Funded Insurance?
We are, unsurprisingly, going to begin with the very basic question here. What exactly is self-funded insurance in the first place? Well, in short, we are referring to health plans for which the employers assume the actual financial risks of providing their employees with healthcare benefits. To be even more precise, the idea is that the employers don’t have to pay those premiums to insurance carriers, and they, instead, pay for the medical claims of their employees directly when they happen. Click this to get a better understanding of it.
As you may have guessed it, this puts the employer in a different role. Instead of being a policy holder, the employer becomes the actual risk bearer. Furthermore, this allows the employers to have better control over the actual health plans and costs. Of course, to protect themselves against some extremely high claims, companies sometimes tend to buy what’s called stop-loss insurance, a policy that reimburses the company if the claim exceeds a specific threshold.
There are quite some differences between this particular solution and the fully insured solution, that is, the option of letting the insurer handle everything while you’re paying the premiums. For one thing, you don’t pay the premiums, as mentioned already, but only the claims as they occur. Then, these types of plans are highly customizable, instead of being limited like the fully insured ones, meaning you get more control over them. This type of flexibility, together with the fact that you can save money this way, makes these plans rather popular, especially among larger or mid-sized companies.
What Are the Benefits for Your Company?
Onto the next question. Now that you understand what self-funded insurance is, the next thing you want to do is figure out what the actual benefits are, so that you can ultimately decide whether you want to go for this solution or not. Let us, thus, talk about those benefits in a bit more details, shedding light on what you need to know about this.
As you may have guessed it, the potential to save money is one of the biggest benefits here. To put it simply, when you go for self funded insurance, you may wind up reducing the overall healthcare costs for your organization, because you won’t be paying the premiums which often include more than the costs of claims – things like state taxes, carrier’s profit margin etc. So, when you go for the self-funding option, you basically eliminate these built-in expenses, which is undeniably a huge benefit. Not to mention that you pay for claims only if and when they occur, which can also lead to you saving some money.
Another great thing about this option is that you can fully customize the benefits in order to actually meet the requirements and the preferences of your employees. Unlike fully insured plans that often lead to companies having to agree to a one-size-fits-all coverage, when it doesn’t. Anyway, this customization option is a huge benefit, and it is bound to help you attract and retain talents.
Speaking of, there is no doubt that you can increase employee satisfaction while using this solution. Apart from the fact that they will love the customization option, they will also be glad to see that you, as the employer, are actually ready to invest in their personalized healthcare plan solutions. That can build loyalty and trust, which is certainly a great thing.
