SELF-FUNDED BENEFITS

• Self-insurance allows employers to better customize benefit plans. Self-funded plans allow employers to specifically offer benefits that fit the needs of their employees and meet employer financial and human resource goals.
  
• Self-insurance allows employers to benefit from the unbundling of services. Major services such as reinsurance and third party administration (TPA) can be obtained from separate vendors at better prices and better service.
  
• Self-insurance allows employers to benefit immediately from favorable claims experience. An employer who self-insures only pays benefits applicable to their group’s claims history. Claims are not pooled with the claims experience of other groups their size. Should an employer experience a favorable claims experience to premium paid under fully insured, it is very unlikely the employer would have their premium lowered.
  
• Self-insurance allows employers greater financial control over how the plan is funded. Funding is more flexible in self-insurance than in a fully insured scenario, possibly improving an employer’s cash flow.
  
• Self-insurance allows employers more flexibility in the manner in which claims are paid. Appeals and exceptions can be handled with greater flexibility and ultimately the employer can make the exception if desired.
  
• Self-insurance allows employers more control in the approach to some federal and most state legislative benefit mandates. Employers can decide whether or not to offer these benefits in many cases.
  
• Self-insurance allows an employer more flexibility in the designing and contracting of managed care networks.
  
• Self-insurance allows an employer to hold their own claims reserves. The employer can earn interest on plan reserves and assets.
  
• Employers who self-insure do not have to pay the full amount of premium taxes. State taxes on a self-funded plan are a fraction of those in a fully insured plan