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A self-funded healthcare plan is when an employer assumes the financial responsibility for providing health care benefits to their employees. The employer is responsible for paying claims as they are incurred instead of paying a fixed premium to an insurance carrier. Employers who decide to self-fund their health care benefits should have the financial resources to meet their obligations which can fluctuate. Employers must also have a long term outlook to be a good fit.
Employers who understand the requirements of self-funding can experience many advantages to self-funding health care benefits including lowering overall cost, plan designs flexibility, improving cash flow, lowering tax rates and interest income on reserves. Also self-funded plans are regulated under federal ERISA guidelines law therefore are not subject to state insurance regulations and benefit mandates.
Careful consideration should be taken in selecting the right broker to provide guidance in measuring risk and choosing the proper fit. Selecting the proper network, stop loss insurance, PBM design and TPA should be carefully weighed. Sagacity Benefits has the experience to provide the proper guidance and support to put your company on the path to success.