SELF-FUNDING
Reference Based Pricing
Health care costs continue to rise, and employers need a solution to help lower the rising cost of health care without putting the burden on the employees. Reference Based Pricing (RBP) has been growing in popularity among larger self-funded plans and is producing major savings for those willing to think outside the box. Benefit Management Group is a leader in the RBP marketplace. To maximize success you need a strong partner – reach out to BMG for more information.
Is Self-Funding Viable?
Self funding or Alternative funding is an excellent way to control the rising cost of Employee Benefits. Like a fully insured plan, a self funded plan also has maximum exposure limits on both individual and group cost. The biggest difference is, when claims don’t materialize employers retain the funds.
Companies as small as 50 employees are reaping the benefits of self funding. As one of Maryland’s most experienced self funding firms we can help determine if self funding is right for your company and walk you through the risk and rewards.
Why Self-Funding?
Partial self-funding provides employers with an alternative way to combat the negative impact of rising costs and saves employers from the difficult decision of stripping benefits from their valued employees. Rather than obtaining medical coverage from an insurance carrier, the employer can elect to fund the risk up to a certain level where a Reinsurance or Stop Loss insurance carrier is brought in. The Stop Loss insurance is designed to limit the employer’s loss to a specified amount to ensure that large, or unanticipated claims, do not upset the financial integrity of a self-funded health care plan.
A Third Party Administrator (TPA) oversees the plan. Their responsibility includes maintaining eligibility, customer service, adjudicating and paying claims, preparing claim reports, and arranging for managed care services such as network access and case management. Everything that is provided in a conventionally fully insured plan is duplicated in a partial self funded health plan. With a self funded plan, the employer holds the cash needed to fund benefits. Instead of sending the conventional, fully insured premium to the insurance company, only a small fraction of the conventional premium is sent to the Reinsurance carrier leaving more funds for claims.
The employer retains the funds when claims do not materialize.