You will perhaps agree unanimously on the decision that health care is a sector that enjoys top most priority in service industry and the concerns that appear challenging are how to design an apt health care scheme and finance them properly. Self funding programs have emerged as an alternative to the conventional forms of fully insured schemes. But before adopting it you need to take into account some integral factors that make it as the chosen one.
- Controlled scheme design: This scheme suggests every employee in a concern should get uniform healthcare benefits. This is irrespective of the designation and state to which anemployee may belong.
- Better cash flow:Self insured health plans aim at regularizing cash flow and optimizing in as well. A self funded plan enables groups of employees and administration to manage cash flow and fund the claims.
- Tax exemption: Fully insured health plans also exempt a number of state taxes and lead to about 1.5% to 3% savings.
- Other eliminations:Self funded schemes also expel the risk charges and profit margins enjoyed by intermediate carriers. This again leads to about 3% to 5% annual savings
What are Self Insured Health Plans?
Self Insured Health Plans is precisely an arrangement of self insurance where the employer of an organization funds employees with general health care and disability facilities from the company’s fund. There are certain characteristics of it, like:
- It is different from a fully insured plan where the employer seeks monetary assistance from the insurance company for attending to the employees and their dependants.
- In this case the payments are directly taken overthe employer. Thus, he can also apprehend the risks involved in direct payment against claims. So, conditions of eligibility and the permitted coverage are strictly mentioned in a plan document.
History of Self-Insurance:
There was still a time when selfinsured healthcare remained in the gray area. But with the emergence of regulations like Federal Liability Risk Retention Act of 1986, Employee Retirement Income Supplement Act of 1974 as well as captives and rent-a-captives schemes, self insurance plans have also taken their position. Today, the scheme holds a firm position and had got improvised with the provision of specialized services too, such as risk transfer benefits extended by insurance agencies, loss control institutions and third party administrators.
Advantages of Self Funded Plans:
In an age where providing health care benefits is a part of compensation package and functions as a lucrative factor that attracts skills and talents of the industry to a particular organization, it is undoubtedly a worth trying scheme. Moreover, you cannot even deny that such a policy renders greater flexibility to the employers too and help them provide different types and amounts of benefits in a much simplified manner.
How Do Self Insured Medical Plans Work?
The basic attribute of self insured plan is that it does not contact an insurance company for meeting the medical claims of its employees. Actually, everything is handled by the company itself and takes care of operations, processes and other expenses on its own. However, it does not need much explanation that such a plan can only be implemented by a company that is quite large indeed.
Plans Available to Self-Funded Employers:
Self-funded Plan employers have the privilege of choosing wide varieties of plans. Some of the most widely used plans are HMO, PPO, EPO, POS and indemnity plans, all with managed care and cost containment programs. In the current market scenario, PPO plans are the most sought after in the self-funded arena. The basis of PPO’s success in self funded plans is that, it is mostly perceived by employees as a fully insured or traditional health plan which offers doctor or hospital access on a regional or nationwide basis.
HealthTechnolgy.com and Self-funded Plan
Administration:HealthTechnolgy.com is New York City based, an integrated HealthIT & Services firm, laser focused at Medicare, PBM & TPAs solutions. In self funded space, we can help our prospective client in the following arena.
- Appeal administration
- Claims adjudication and payment
- COBRA administration
- Customer services
- Financial and utilization analysis and reporting
- HIPAA Certificate of Coverage production