Self-insurance Options Including
Medical Stop Loss
Self-insurance is a type of insurance where the employer pays the employees' medical claims. The insurance company or a third-party administrator (TPA) manages the payments and offers your employees access to its network of doctors, specialists, hospitals, and pharmacies available through its fully-funded plans. The claims payment is based on the "expected" claims of employees calculated using historical claims data.
There are two types of self-insurance, administrative-services only (ASO) and minimum premium.
Under these plans, you will pay a monthly fee mainly to cover expected claims, plan administration, and stop-loss insurance to provide financial protection to you in the event "actual" claims exceed the expected. If the claims payment is less than the "expected" amount at the end of the year, you may receive your money back. The actual refund amount depends on your plan arrangement. You may want to consider this option depending on your company's needs and circumstances.
There are many ways to structure these plans, such as adding financial protection, known as "stop-loss insurance," in an event when the "actual" claims exceed the "expected" claims amount and considering partial self-funding. Self-insurance plans provide several benefits to employers, including flexibility in meeting health care challenges and managing health care costs. Since self-insured health insurance plans are regulated at the federal level, they are not subject to state insurance laws and oversight. This can financially be advantageous since state regulations can be cumbersome and expensive.
Our team at Diversified Brokerage has extensive experience to seek the best self-insurance options for you.