Self-Funding Can Save Employers Money

May 2, 2019

 

Employers are fed up with traditional health insurance. It costs too much, it’s not transparent, it’s not improving employee health—and it’s never going to fix itself. If you want to deliver year-over-year reduction in healthcare expenditures, it begins with self-funding.

Click here to learn how self-funding in the Everlong Group Medical Captive can help your company’s bottom line.

 

Self-Funding Can Save Employers Money

Employee Benefit Adviser

By moving employers to self-funding, we have seen some of them reduce their year-over-year benefits costs by 15% or more in the first year alone.

Potential – but not guaranteed – cost savings in a self-funded health plan are the result of employees spending less money on healthcare than the plan has allocated for claims that year.

For example, if the employer funds a plan at $1 million, the administrative cost bucket would have about $150,000, leaving $850,000 in the claims bucket to pay medical claims. If the employees spend only $750,000 on healthcare during the year, the claims bucket would still have $100,000, which the employer would retain.

Self-funding is not about savings, it’s about control – control of the plan design; claims data; and, most important, the healthcare supply chain.

Read More: https://www.employeebenefitadviser.com/opinion/self-funding-can-create-real-savings-for-employers

Recent Posts

What You Need To Know About Captive Health Insurance

What You Need To Know About Captive Health Insurance  2020 was a tough year for employers. The pandemic and economic shutdown presented companies with multiple financial challenges, and rising health-related costs only added to the problem. Even worse, many companies...

Case Study: Saving $15 Million Through Self-Funding in Everlong

May 1, 2019

HoldCo, a holding company with 184 employees on their fully-insured medical plan, was presented with a 23% renewal increase for 2010. Frustrated with their lack of options, and knowing that adding employees through planned acquisitions would only compound future increases, they needed a better solution.

Their broker-consultant worked with management to develop a strategy to take control of their health plan.

The first step was to transition the company from fully insured to self-funded so they could gain insight into and control over their actual claims costs. As a result of this move, HoldCo was able to achieve a 4% decrease in medical plan costs in 2010 vs the 23% increase. This was accomplished with no change to the plan designs.

The broker-consultant also had HoldCo join Everlong. In the Captive, the company could participate in the innovative insurance and funding solution that takes the profits that health insurance carriers make on individual plans and pays that money back to members as owners of the Captive. This innovative funding solution, plus Everlong’s group purchasing power, helped keep HoldCo’s future health plan increases far below what they would have been had the company remained fully insured.

In addition, self-funding and moving to Everlong enabled HoldCo and their broker-consultant to analyze and project claims costs and to take innovative steps to better manage risk and further control costs in their health plan.

In eight years, the number of employees in the plan grew to 426. Over this period, Everlong’s innovative solutions enabled HoldCo to save a cumulative total of $15.3 million compared to what the company would have spent had they remained fully insured—all without cutting benefits for the employees.

Download PDF

Recent Posts

What You Need To Know About Captive Health Insurance

What You Need To Know About Captive Health Insurance  2020 was a tough year for employers. The pandemic and economic shutdown presented companies with multiple financial challenges, and rising health-related costs only added to the problem. Even worse, many companies...