Q: What is the basic concept of self-funding?
A: Self funding is an alternative to traditional and often costly health coverage. Instead of purchasing conventional insurance, employers pay for claims directly. In order to protect themselves from catastrophic individual claims, and the accumulation of all group claims, employers purchase stop-loss protection. Read More...

Q: Why should our company self fund?
A: Employers have more cost controls with self-funding. They know where their money is spent. If medical claims are less than expected for the year, their plan keeps the money - it's not profit for the insurance company. Employers can use that money for next year's benefit expenses. If medical claims are higher than expected employers are protected by Stop-Loss Insurance. Read More...

Q: Who should self-fund?
A: Companies that self-fund typically have many common denominators:

Q: What are the risks of self-funding?
A: One of the benefits of self-funding is the opportunity to spend less money for health and other benefits. However, along with opportunity comes risk. A plan which has low utilization has the potential for financial savings. A plan with high utilization could experience a financial risk greater than if they had a fully insured plan.

Q: How does the cost of a self-funded plan compare to a fully insured plan?
A: Although the cost of a self-funded plan could potentially be more than a fully insured plan, if the employer is willing to take some risk, there is a potential to save money.

Here's an example to illustrate this point. If you have a 128 member group and quote a self-funded plan to a comparable fully insured plan, the self-funded plan may have a maximum liability of $39,000 a month and the fully insured plan may cost $36,800 a month. An employer might have a little higher liability for a self-funded plan. However, the money that is set aside for claims cost is retained by the employer if the group has a low claims year. In a high claims year, the plan is protected by Stop-Loss Insurance. This potential to save money doesn't exist with a fully insured plan.

Q: How does Stop-Loss insurance work?
A: Employers assume part of the risk under a self-funded plan by taking the responsibility to pay part of the plan's claims. Employers tell us what amounts they want to accept as risk. We realize employers want security, which is why we offer Stop-Loss Insurance underwritten by a variety of highly rated insurance carriers. Stop-Loss Insurance puts a cap on the employer's medical claim payment risk. This cap is based on the amount employers must pay for an individual's claims (specific coverage) as well as the combined amount of all claim which employers must pay in a given period (aggregate coverage). When purchasing both specific and aggregate stop-loss insurance, employers are protected from both high individual medical claims and high claims volume.