What is Self-Funding?
Self-funding (or self-insurance) is an alternative risk-transfer strategy. Employers with self-funded plans typically put their health plan contributions (as well as employee contributions) into a designated bank account to pay for employee and dependent health claims, instead of paying a fixed premium to an insurance carrier. Catastrophic loss insurance (known as stop-loss insurance) is often purchased to provide a known maximum liability to the employer. A Third Party Administrator (TPA) usually processes the claims and oversees the administration of the plan.
Why self-fund?
Self-funded health plans enjoy many advantages over fully insured plans. Primarily, self-funded plans can be custom-designed to the unique needs and objectives of the employer. This flexibility, along with improved cash flow, maintaining control over health plan reserves, state tax advantages, avoidance of state-mandated benefits, and more personalized, attentive service, has made self-funding a popular and proven health plan financing tool.
Feel free to contact one of our Account Executives to learn more about the benefits of self-funding.
North America Administrators 1-800-411-3650
Bruce Thompson - ext. 177 -
Moni Lacey - ext. 174 -
Danny Dugan - ext. 170 -
