Tip 121- health Plan Self-Funding

Surveys report the number of companies that partially or completely self-fund their health plans has increased from 44% in 1999 to 60% in 2011.

That trend may accelerate as health insurers unveil new partial self-funding options for groups down to 25, 20 and even 15 lives.

How do these new plans work?

“Specific stop loss” limits are set at around $40,000; that’s the employer’s exposure for the medical expenses of each covered individual. The claims of the entire group are also limited by “aggregate stop loss insurance.” Self-funding creates more freedom with plan design and exempts employers from some mandates.

The efforts of employers actively working to have a healthier more productive work force are largely lost in the fully insured small group marketplace.

With self-funding, these efforts translate directly to the bottom line.