Self-funding provides an organization with more control over establishing their plan to meet the needs of their employees than that of a fully-insured plan. However, there are several factors to examine when considering if self-funding is right for your entity.
Firstly, the size of your organization determines which plan will best meet the needs of your policy. For instance, organizations that have one hundred employees or more are an optimal candidate for self-funding. Plan utilization is also important to evaluate when considering self-funding or using a fully insured plan. Another essential factor to pay attention to is premium increases: Are they increasing yearly, by how much are they increasing and what is driving the rate at which they are increasing?
With fully insured plans, employers may not be able to access all of their claims information. For instance, they may not have access to reports regarding costs or those outlining whether or not employees are under a plan that is most suitable for them and their families. It is crucial to ensure that there are still plenty of alternatives for physicians, hospitals and other medical accommodations that will adequately meet the needs of your employees if you are utilizing the fully insured option.
*The views and opinions expressed in the Public Risk Management Association (PRIMA) blogs are those of each respective author/speaker. The views and opinions do not necessarily reflect the official policy or position of PRIMA.*