In a recent survey conducted by ADP, nearly 70 percent of employers say they are “very concerned” or “extremely concerned” about the rising cost of benefits. If you share this concern, you may be wondering what options you have to control these costs. For many employers, the answer is a self-funded insurance plan. I know you’re probably thinking your company is too small, the administrative burden is too daunting, or that you’ll be exposed to too much risk with a self-funded plan. I understand completely because I felt those same concerns. However, these are common misconceptions and pitfalls that can easily be avoided by partnering with a benefits management team like Sona Benefits and third party administrator (TPA) with industry specific experience and knowledge. Even though being self-funded sounds like the company takes sole responsibility for the plan, you won’t be operating in a vacuum, your benefits management team will take care of the day-to-day administrative tasks such as collecting co-pays and premiums and paying claims. Your benefits management team will also help you design your group plans, coordinate stop-loss insurance coverage, navigate provider network contracts, and provide claims review services.
Not only is a self-funded plan a practical option, but there are several advantages for your company and your employees. Cost control is certainly one of the most obvious benefits. Under Employee Retirement Income Security Act, self-funded health plans are exempt from state insurance laws covering reserve requirements, state mandated benefits, and premium taxes, which can result in significant savings. As employers, we often face a big challenge in our benefit coverage versus affordability with traditional insurance plans. With a self-funded plan you have greater flexibility in designing a plan that actually meets the coverage needs of your employees while still being affordable. Sona Benefits can easily obtain claims data which can be used to identify health issues that are driving claims costs. With this information we can help you take steps to control these costs by providing wellness and health education programs to your employees. Sona Benefits clinical pharmacists can identify and reach out to individuals with chronic conditions such as diabetes, stroke, or cardiovascular disease with information and provide individualized goal oriented care programs. Membership in the program is optional but employees are encouraged to participate through incentives such as discounted co-pays.
Some of the biggest challenges that self-funded employers face is the risk involved with being directly responsible for paying medical claims. Claims can be higher than expected and major claims are often unforeseen which can significantly impact a company’s cash flow. A stop-loss insurance policy will help minimize this risk but there are payment caps on the coverage. Managing claims through wellness programs and disease management are essential but this means you have to be willing to take on the responsibility of being actively engaged with your health plan.
Choosing the right kind of health plan for your company has a significant impact on employee engagement and wellness as well as your financial success. Our decision to become self-insured has been rewarding not only to our company but to our employees. We are fortunate to have a team of highly train healthcare providers on staff that are committed to wellness and disease management. This has been the foundation of our success in containing claims costs and improving our overall health. Our Sona Benefits team would love to be your partner and help you achieve these results too.
