Q: I have been hearing more about self-insuring my company’s health plan. Is this something that I should consider?
A: The simple answer is YES! You should consider ALL of your options. The dramatic escalation of employee health care costs has prompted many CFOs and HR managers to look for new ways to gain control over premium expenditures. Many times we look to controlling these costs through plan design; however the financing of the plan itself should also be considered. Self-funded employee health care insurance plans are one alternative that can allow firms to reduce and manage their health care costs while still delivering the health coverage they desire for their workforce.
Although self-insuring health coverage is still relatively a small portion of the WNY market, it is believed that while costs continue to increase and more regulations come through from healthcare reform; employers should evaluate all of their plan and funding options.
The following key objectives are common to companies seeking to self-fund their health care plans:
Gain control over how insurance premiums are spent, potentially improve cash flow and maintain company health plan reserves for investment.
Reduce plan operating costs.
Tailor a health benefit plan to the needs of the company, thus enabling it to attract and retain employees.
One thing for sure is that alternative funding is NOT just for group companies with several hundred employees. Although before considering these options a detailed analysis should be done of your company as there are now funding options for companies of 50+ employees. Take the time this year to not only review your benefits options, but your financing options as well.
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