4 Factors to Consider When Opting for Self-funded Health Plan

1. 4 Factors to Consider When Opting for Self- funded Health Plan The soaring employee healthcare cost has made many organizations turn to self- funded or self-insured health plans. Though fully insured plans that are backed by an insurance company offer a sense of security, their rigidity and missing cost containment are always troublesome for organizations. That’s where self-funded health plans come into the picture, in which the employer will take the financial responsibility of the health of the employees. If your organization is also looking for ways ofhealthcare cost containment and considering self-funded plans, here are the four factors to take a look at. 1.Analyzing the work involved When an organization opts for a self-funded healthcare plan, it has to assess a lot of factors such as the organization’s capacity to manage the workload. This includes keeping a record of benefits eligibility and ensuring that all the policies meet the compliance. 2. Considering flexibility While fully-insured plans involve lesser risk, self-funded plans provider greater flexibility to the organization. Every company and its employees have a different need, and a self-funded plan gives them the freedom to create unique programs. You can choose own cost and utilization controls, networks, service providers, etc. 3. Calculating the risk If an organization goes for a self-funded plan, it will be responsible for all the health claims filed by the employees. Therefore, it is imperative to figure out if you are financially stable to pay those claims. A company needs to calculate the amount of risk to retain, workforce stability, and cash flow.

2. 4. Assessing the savings If done the right way, self-funded healthcare plan could be more beneficial from a cost perspective in the long run. The reason being that it doesn’t include the additional expenses that come with a third-party fully insured plan. However, before you say yes to the self-funded option, make sure to calculate the savings and compare it with the risk involved. Final Words Self-funded health plans have their share of benefits. Businesses might find it difficult at the initial stage to analyze different factors and create a health plan that’s right for them. However, it could turn out to be a rewarding financial decision a few years down the line. When your business is planning to go self- funded, seek the advice of professionals who primarily work with organizations to determine their current state, analyze trends, and come up with a customized self-funded health plan that aims at improving the health and wellness of employees.