Like Liberty Mutual’s car insurance advertising – “only pay for what you need” – would you like to maximize cash flow and free up funds for other needs? Would you like to eliminate those expenses charged by an insurance company that you really don’t need? Your health plan you can do just that.
Self-funding your health plan allows you to maximize cash flow by paying claims ONLY if and when they occur. This contrasts a fully insured plan where you pay the insurance company a monthly premium each and every month regardless of claims that you may incur. This gives the insurance company all the cash flow benefits rather than your company. Why give them your money to profit from rather than retaining it?
With self-funding, you can exactly and precisely duplicate your current plan of benefits that you offer to employees – you’re simply changing the way you pay for those claims. And, with self-funding you can further customize your plan of benefits for your employees the way that you want to offer them, and what’s relevant for your company and your culture, rather than what the insurance companies want to sell. This eliminates paying for coverage that you choose not to offer, or don’t need.
The reason that you can customize your benefits so that you only pay for what you need, is because self-funded plans are only governed by ERISA – a federal law that sets minimum standards for health plans in private industry to provide protection for individuals in these plans. Fully insured plans on the other hand, are subject to all state insurance laws which can be extremely extensive because of all the mandated benefits required by various State Departments Of Insurance, thus making them more expensive.
When you can customize your self-funded health plan for your organization rather than that of the insurance company, it allows you to ONLY pay for what you need or want to offer, and ONLY pay those claims if and when they occur. Stop loss coverage will protect against any loss for any big claims that may occur.
It all comes down to 2 basic questions: 1) what are the benefits I want to offer to my employees, and 2) what’s the best way to pay for them? It’s as simple as “only pay for what you need.”
In these uncertain times, maximizing cash flow is critical for the efficient and profitable operation of your company. Maximizing cash flow and reducing risk also allows you the option of giving back to your employees with meaningful wage increases and/or a reduction of the contributions from their paycheck – not to mention offering MORE benefits to attract and retain employees.
Frank Stichter has been serving the needs of employers for nearly 40 years, specifically focusing on self-funded plans and the benefits that can be offered to companies. If you’d like to learn more, call him at (970) 349–7707, or email him at [email protected]. You can also schedule a call with Frank HERE.
