A look at self-funded health plans
In the wake of the COVID-19, more employers than ever are looking for ways to protect their cash flow without shifting costs to employees or trimming the benefit offered. A self-funded health plan can be a part of that solution.
Surest offers two ACA-compliant employer-sponsored health plan solutions to employers with 51+ employees—self-funded and fully insured.
Since 2016, Surest has operated its self-funded administrative services only (ASO) platform. Today, there are active members in all 50 states and Puerto Rico. Clients range from small employers to Fortune 500 companies in a number of diverse industries.
What are the benefits of a self-funded health plan?
A self-funded plan, also called a self-insured or administrative services only (ASO) plan, is what it sounds like: Employers fund their group health insurance, taking on the financial risk of—and responsibility for—providing benefits to employees. In the past, only large companies opted to self-fund. In today’s market, that’s changing. Benefits of self-funding include:
- Cost savings: By only paying for health care employees actually use, rather than paying fixed premiums to an insurance company, employers and employees have opportunities to save.
- More control over plan design: Benefits strategies can be customized to better fit employees’ needs.
- Tax savings: In some states, there are no premium taxes on self-funded plans.
- Plan administration and account management: Claims, customer services and reporting is done for you.
What are the risks of a self-funded health plan?
On the flip side, a self-funded plan can also be risky. The employer—not the insurance carrier—is on the hook to pay employee medical claims. If an employer doesn’t have the financial resources to absorb the costs of an employee who needs an organ transplant, for instance, or an employee who is injured in a serious car accident, those multi-million-dollar medical claims could be financially devastating to the bottom line, particularly to a smaller company. This differs from a fully insured plan, with employers paying pre-determined premiums to insurance carriers.
Protecting employers against unpredictable claims
There is risk with self-funded, but there's also stop loss insurance to protect against that risk. It's exactly as the name implies—it exists to stop losses by capping an employer’s out-of-pocket expenses for employees’ medical bills. Stop loss insurance is not medical insurance—it’s a risk management tool. If the claims exceed a predetermined amount—due to a virus outbreak, cancer diagnosis, chronic disease or devastating accident—the stop loss policy would traditionally cover those additional expenses. The tradeoff? Stop loss policies cost money, too. The two most popular types of stop loss insurance include:
- Individual stop loss: The employer is responsible only after a set amount is reached.
- Aggregate stop loss: The employer is protected if claims are larger than normal.
Who administers claims for self-funded health plans?
Many times, businesses who choose to self-insure don't have the capacity to process their claims in-house. To alleviate the stress of trying to do it all, it’s common for self-insured employers to reach out to health plan administrators to process claims, handle customer service, and manage administrative tasks. This is where Surest comes in.
The Surest self-funded solution at a glance:
With the self-funded health plan solution, Surest has the ability to:
- Design plan benefits
- Operate the plan
- Issue member ID cards
- Handle day-to-day administrative tasks
- Provide customer service through the Member Services
- Approve and pay employees' medical claims as they arrive from the doctor, hospital or pharmacy
- Provide plan customization
- Provide detailed and flexible reporting
- Offer enrollment assistance
- Make sure the plan complies with legal requirements
- Allow businesses to do what businesses do best—focus on running their business
In addition, the Surest plan offers:
- Pharmacy benefit management
- Stop loss reporting
- Relationships with COBRA administrators
- A comprehensive virtual health network
How does the Surest plan work?
Monthly paycheck deductions include everything from preventive to emergency care, primary and specialty visits, most diagnostic testing and prescription drugs, and treatment for chronic conditions, cancer and unexpected catastrophic events. That’s not all, though. The plan is innovative. It was designed to simplify the insurance experience, uncover hidden costs and address sometimes random variations in prices by using data to determine quality. Features include:
- Full coverage right out of the gate: With no deductible and no coinsurance, members are covered Day One (not after chipping away at a deductible).
- Cost transparency: Members know what they'll pay before seeking care. Even better, prices are low for what we consider higher-value options, such as those based on quality, efficiency and overall effectiveness of care.
- A single price: Surest bundles health services that often occur together and prices them accordingly. By doing this, members pay a single price for a health care event. No additional fees tacked on for what's done in that one visit.
- Broad network: Members can choose doctors, hospitals, clinics and health care facilities from the national UnitedHealthcare provider network. See specialists without a referral.
- Members can check costs, compare options and find potential savings from the convenience from the palm of their hand. Everything has a price (copay). With this price visibility, Surest members shop and choose differently.