Employers have changed how they view health care plans. With all the reforms and high costs, companies struggle to cope with the ever-changing landscape. Employers create benefit plans with employee retention and cost control on their minds. However, many forget about a little helper called voluntary benefits.
Nearly every employer looks to achieve these goals with health care. Offer great benefits to employees without breaking the bank. Many companies achieve this noble goal by using a self funding approach that features a high-deductible. Often, these companies are larger. Recently, smaller companies have taken this approach, too.
The Self-Funding and Voluntary Benefits Dynamic
When paired with voluntary benefits, employers reduce costs greatly while still giving their employees the type of insurance they need. Plus, employees can tailor their coverage with a variety of options.
So why have employers started going the self-funded route? That's simple. Health care costs are rising. By using self-funded services, a company can keep medical expenses down.
What Does Self-Funding Offer?
Self-funding may sound nice in theory, but it's important to understand what self-funding allows employers to do. Overall, an employer can:
1. Control Costs: Self-funding allows employers to control costs, with funding amounts that are pre-determined. This ensures the profit margin of the insurance company is cut down.
2. Protect the Plan: Using stop-loss insurance as an employer can ensure no catastrophic claims exceed the pre-determined amount in their self-funded plan.
3. Only Pay Actual Claims: Instead of paying the margin created by an underwriter, a self-funded plan allows the company only to pay medical claims that actually happen.
4. Keep Track: A self-funded plan ensures an employer can keep track of the plan and accounts. By keeping statistics year after year, an employer can plan for the future management of their self-funded program.
5. Further Savings: Certain self-funded plans save even more money by utilizing a predictive analysis to determine health and wellness. A third-party administrator usually administers this.
Lastly, many companies prefer self-funded plans because they may not be subjected to Obamacare regulations. Since they do not have to follow all the regulations of the Affordable Care Act, the company can tailor plans to the needs of specific employees and groups.
Adding Voluntary Benefits to Self-Funding
Once an employer has a self-funded benefits plan, they can begin to allow voluntary benefits. Voluntary benefits complement the plan and allow employees to meet their every need – without adding unnecessary costs to the plan.
By combining these two options, employers allow their employee the ability to customize the benefits to their unique needs. The benefits of this methodology are vast and allow companies and employees to account for expenses in a detailed manner.
Always Be Communicating
No matter how a company offers health insurance, communication is key. The majority of employees are tired of spending so much money on health care. As well, most have concerns about how the changing health insurance market and reform will impact their families and pocketbooks.
Studies have shown that 95% of employees need an individual to talk to them about benefits information. This means your employees need to speak with an administrator. They want to keep communication lines open when they have questions and want access to resources.
Communication is especially needed when a company offers a self-funded plan with voluntary benefits. The variety of options and costs can be confusing – so being able to communicate with an administrator is key.
A Winning Combination
Employees want great benefits and lower costs. Most companies want similar things in regards to health insurance. As such, many have found self-funded plans combined with a myriad of voluntary benefits options to be a dynamic insurance duo.
For more information about self-funding contact Skyline Risk Management, Inc. at (718) 267-6600.