Advantages of Self Funding

Cash flow advantages:

  • Pay as you go approach
  • Reserves held by employer (approx. 2 mos.)
  • Utilize the earnings on claim payments pending claims processing

Cost savings:

  • Interest on funds otherwise held by the insurer
  • Reduced Fixed Costs
  • Depending upon size, costs are based on Plan’s experience versus an Insurance Company’s pooled business experience

Plan control:

  • Easier monitoring of claims costs
  • Access to more detailed claims and utilization data
  • Can carve out Prescription plan to third-party to realize additional savings

Plan design flexibility:

  • Can customize plans to fit employee needs

Stability of self-funding:

  • Larger employers rarely return to fully insured

Fiduciary Responsibility:

  • Fiduciary options available (reduce liability)

Allow claims appeals to be handled by carrier, in compliance with Healthcare Reform
Allow claims appeals to be handled by outside third party