Self-funded insurance has become a popular option for many employers. That is because it allows companies to have control over healthcare benefit expenses.
Major Moving Parts of Health Insurance Plans
Before choosing what type of insurance to offer your employees, you should understand the major factors that affect plans.
- How much a company owes for healthcare claims made by employees
- How to administer and manage the plan, which is usually handled by a third party
- How much the company will pay for employee insurance
Choosing a self-funded plan may seem risky. So, many employers are concerned about bad scenarios. For instance, you may be worried about the possibility wherein more than one employee experiences a tragic event at the same time. A common concern is when employee claims exceed the allocated money for self-funded plans.
Additionally, the Bureau of Labor Statistics (BLS) reported that healthcare expenditures increased by 4.5% in 2019. Supporting self-funded plans with stop-loss insurance can further help in reducing the burden of climbing healthcare costs.
It will help companies offering self-funding in limiting their liability. As the name implies, it refers to a policy enabling businesses to predict cap expenses for possible medical bills.
What You Need To Know
It is important to note that this type of coverage is not medical insurance. It is a specialized kind that aims to protect employers from huge losses. It is a risk and financial management tool for companies.
There are two ways to limit employer liability:
- Aggregate – Under this policy, the cap on the amount the company would owe for all employee healthcare plans for an entire year is pre-determined. The service provider for the stop-loss coverage will reimburse the company for claims that exceed the cap set for the year.
- Specific – In this policy, the employer gets reimbursement every time an individual exceeds the pre-determined deductible.
Keep in mind that each company and workforce have a unique set of needs. Different factors should be considered to determine whether your company needs to have stop-loss insurance.
All of these benefits can help make a difference in a company. Getting insurance with the proper risk management tool in place is a good investment that will protect your employees while managing finances well.
Making the right choice is important to ensure employee satisfaction while minimizing the risks for companies. To find the most accurate policy and coverage, it would help to shop around. Working with a reliable third-party administrator (TPA) can also help.
Companies looking for a way to reduce the cost of employer-sponsored healthcare insurance can benefit from a self-funded plan with stop-loss coverage. That is where National Insurance Partners, Inc. can help. Our team of experts has the necessary knowledge to assist companies in making the right decision when it comes to employee healthcare benefits.
To learn more about stop-loss insurance and self-funding, discuss your needs with National Insurance Partners, Inc. You can contact us at National Insurance Partners