Feb 1, 2018 | WNC Health Insurance |
WNC Health Insurance's Guide to Self-Funded Health Insurance Plans for Small Business Owners www.WNCHealthInsurance.com | 2018 WNC Health Insurance Self-funded health insurance plans, a.k.a. self-insured plans, have been available to businesses for decades, but the risk of a large claim, a wide variance in month to month plan cost, and regulations, has prevented smaller businesses from entering the self-funded arena. Fully insured group health plans have for many years offered consistent plan payments and peace of mind for companies and organizations with less than 50 employees. An employer pays a level plan premium each month and the insurance company pays the policy benefits. And prior to 2014, a small employer with healthy employees benefited from lower health insurance costs since total incurred claims were a major factor in determining rates. Lower claims meant lower rates. But then that all changed under the Affordable Care Act (ACA) in 2014. The ACA created a community rating* for the small employer. A healthy group with relatively few claims was given the same rate as a group with high claims. No matter what a group did to improve employee health, the rate would be the same. Healthier groups paid a lot more for their health insurance; groups with a high claim experience paid a lot less. So, health insurance companies got smarter and have now made choosing a small business health insurance plan increasingly simpler and easier. Small business owners now have instant access to big name insurance carriers such as Aetna, Blue Cross Blue Shield, United HealthCare, etc. And as a result, these new self-funded health insurance plans are becoming some of most widely utilized health insurance solutions for small business owners. *A change in North Carolina insurance law in response to the Affordable Care Act's community rating now allows employers with as few as 26 eligible employees to purchase a self-funded health insurance plan. www.WNCHealthInsurance.com | 2018 WNC Health Insurance Self-funded insurance plans offer a high level of flexibility and customization, allowing small businesses to select from an array of benefit plan configurations and administration options. These plans are a great option for smaller businesses that need relief from rising health insurance costs. Plans now have level premiums for the entire 12 months of the plan year, just like fully insured plans. The premium pays for plan administration, reinsurance, and expected claims funding. Reinsurance is included to cover claims if the amount allocated for expected claims funding is exceeded. Under this scenario, there is no additional cost to the group. If the group has a favorable claim year with lower than expected claim funding figures, the group shares the excess funds with the insurance carrier. Under this scenario, the group would get money back. Since the plan qualifies as self-funded, the employer has access to claims data. This helps the employer respond to new trends, focus on health and wellness, and enjoy the flexibility in plan design. These plans now include additional benefits such as: Savings of up to 20 percent for some groups Opportunity for a credit refund at end of plan year Predictable monthly payments Professional service for claims and payments Broad provider network www.WNCHealthInsurance.com | 2018 WNC Health Insurance Self-funded insurance plans give business owners control over the distribution of benefits and provides employers with the flexibility to design individualized health insurance benefit plans. One major factor that was designed with small businesses in mind is the monthly accommodation. Employers that make use of this are required to pay maximum costs for the plan on a monthly basis. If claims exceed the amount the employer set aside to pay in any given month, the insurance company advances that particular amount of money and allows future premium payments to credit back the amount of money advanced. Each premium payment will include: A maximum claims amount based on the health of employees An administration fee that covers the cost of claims processing and care management A stop-loss premium covering the cost of insurance on higher-than- expected claims Other beneficial features of self-funded health insurance include: It is designed as a pay as you use plan - thus you pay for only the health care that you make use of and nothing more You get the excess claims as a refund at the end of the year For costly and unexpected claims, stop-loss insurance kicks in Self-funded plans are not subject to state laws and regulations. Simply put, this means that state-mandated benefits, state prompt payment rules and standards of network adequacy do not apply. These plans are regulated under federal law. Self-funded health insurance plans were created for small employers with healthy employees who want to save money on their group health insurance plan without sacrificing benefits. These self-funded health insurance plans exist under several trade names and are offered by all the health insurance giants in North Carolina to small employers with as few as 26 employees! www.WNCHealthInsurance.com | 2018 WNC Health Insurance
Small business owners now have instant access to big name insurance carriers such as Aetna, Blue Cross Blue Shield, United HealthCare, etc. This guide will help you learn how.