What Does It Mean To Self-Insure

Protecting your employees is one of the top priorities for any business in the area. And the fact is that if you have more than 50 team members on the payroll, you’re actually required by law to offer them some form of health insurance.

It can be expensive to find a plan that fits everyone’s needs and budgets, but one of the options that is worth taking a closer look at is to use a self-insured group health plan.

Also called a self-funded plan, this is a type of group insurance that has helped countless businesses around the country and in the area as well. But what is it and why is it a good option to consider? Taking a closer look can show you just why so many other businesses have turned to this type of policy for their employees.

What Is A Self-Insured Health Plan?

A self-insured group health insurance plan is a type of insurance policy that allows the employer to assume the financial risk for giving its employees health care. In traditional plans – usually called ‘fully insured plans’ – it is the insurance company that takes on the majority of the risk associated with the insurance. But by taking on the risk themselves, a Oroville, WA business is able to lower the overall monthly payments they have to pay.

In these types of policies, the employer ends up paying out of pocket for each claim that is filed on the policy instead of paying the monthly fixed premiums to the insurance provider. You do still pay a specific monthly amount, however. But this monthly amount is set aside in a kind of trust fund designated just for the employees’ bills. When an employee files a claim or uses their insurance, the money is pulled from this account.

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For example, an employee goes to receive treatment from their medical professional and files their insurance at checkout. The bill is applied to the trust fund set up in the self-insured health plan, and the money is taken from that pool of money. This happens regularly as employees file their claims and receive their treatment.

The overall costs of a self-insured plan are designed based on the overall expected costs of a business’ expected costs. Things like the number of employees covered and the average age of them will impact the cost. However, at the end of the year any money left over in the account that has been paid over what was used will then be split between the Washington employer and the provider of the insurance policy, depending on the agreement within the insurance contract.

The Benefits Of a Self-Funded Health Insurance Plan

There are numerous reasons that a self-funded health insurance plan is worth considering. While they’re not a perfect fit for every business, those that they will work well for will find tremendous benefits. Here are some of the main ones.

It can be expensive to find a plan that fits everyone’s needs and budgets, but one of the options that is worth taking a closer look at is to use a self-insured group health plan.

Also called a self-funded plan, this is a type of group insurance that has helped countless businesses around the country and in the Washington area as well. But what is it and why is it a good option to consider? Taking a closer look can show you just why so many other businesses have turned to this type of policy for their employees.

The obvious reason that a self-funded health insurance plan is worth considering is simple – money. By eliminating the monthly premiums and replacing it with these policies, you can often lower the monthly payments that you must make.

Employers can fully customize their plan to match the needs of their employees instead of buying a traditional ‘one size fits all’ policy that may cost more.

Employers don’t have to prepay for coverage under a policy, which can help improve overall cash flow in a significant way.

Simply put, a self-insured health insurance plan could be exactly what is needed to meet compliance while also giving your Washington employees insurance that they can really use.

Is It Right
For Your Business?

It is important to remember that with a self-insured plan, the employer is assuming the risk associated with paying for health care for your employees. This means that you need to actually have the cash flow needed to fulfill that obligation. Health care costs can suddenly come in a wave that leaves you struggling to raise the funds. As such, it’s important that you have solid, dependable revenue in order to confidently pay for any costs that may come up.

However, you can purchase stop - loss insurance along with your self-insured plan. This additional coverage protects you by reimbursing you for claims that exceed a certain dollar amount.

No matter what, the bottom line is that any Oroville, WA business will eventually end up having to consider providing insurance to their employees. Self-insurance plans are one option that can help, and should be given some consideration by any business thinking about finding a good plan for their needs.

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