Is Self-Funding right for you?
Self-funding is an effective method for taking control of health care expenditures and creating financial & operational efficiencies that benefit both the employer and its employees. These benefits require a long term commitment which, like any long term fiscal decision, requires a sound understanding of both the advantages and potential disadvantages. Dollar Based Dental has limited risk, unlike major medical plans which limits potential disadvantages to a known risk.
Advantages
- Overall Control
Complete flexibility of plan design, funding & reserve margins - Monetary
Money previously held in the form of reserves, incurred claims & reserve/claims profit margin is held in your accounts and earns interest for you - Reduction of Premium Tax
Self-funded plans are not subject to the premium taxes fully-insured plans pay - Elimination of State Mandated Benefits
State mandates are not enforced as plan is governed solely by ERISA - Administrative Efficiencies
By utilizing a Third Party Administrator eligibility, billing, claims payment & claims resolution is streamlined through one location. Client satisfaction is increased and plan performance is maximized - Reduced Operating Costs
Administrative fees incurred by TPAs are often lower than in fully-insured arrangements - Reporting
Accurate, detailed claims utilization reporting & analysis is available to self-funded plans that is not readily available to their fully-insured counterparts - Cost and Utilization Controls
The plan dictates how much or little medical management to incur within the plan