Partial Self-Funding

Small employers are rarely presented with healthcare proposals other than traditional fully insured plans. This is because most agents do not take the time to fully understand the benefits of alternate options so they hesitate to present these options to employers. Many times clients hear they are too small or there is too much risk associated with self-funding. With the volatility and rising costs associated with health care clients need to understand how to limit the risk and enjoy the cost-control benefits of “partial” self-funding.

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In a partially self-funded environment the employer purchases a fully insured traditional health plan with a higher deductible and out of pocket exposure. The premium savings associated with the higher deductible plan purchased is then used to fund that plan down to a richer employee benefit. The net result is that the employer keeps their employees whole while reducing the overall cost. Since the base plan is fully insured no aggregate coverage is needed and all state mandates apply.

Careful consideration should be taken in selecting the right broker to provide guidance in measuring risk and choosing the design. Sagacity Benefits has significant experience in the partially self-funding arena. Let us provide the proper guidance and support to put your company on the path to success.