A growing number of employers are discovering that a self funded health plan can be a cost effective alternative to the traditional fully insured approach.

“For many years many larger companies, including private sector employers as well as non profits and government organizations have opted to self fund their health insurance benefits to provide greater oversight, control, better service and to control costs. Employers that use this approach are passionate about it because it can help alleviate significant cost increases and enables employees to understand the value of their health benefits and become better consumers of health care.” In addition the implementing of wellness plans and programs can have a direct benefit on the costs incurred by the employer as savings generated drop immediately to the bottom line.

Since the controversial medical loss ratio requirements under reform do not apply to self insured plans or plans that purchase reinsurance to protect against catastrophic losses the number of employers who are planning to move to Self Funded Employee benefit plans are expected to grow significantly.

Employers who opt for self funding enjoy the following advantages:

  • Claims Process and Administrative Services Flexibility
  • Plan Cost and Utilization Control
  • Improved Cash Flow
  • Choice of Service Providers
  • Flexibility in Plan Design
  • Elimination of Carrier Profit Margins
  • Lower Operating Costs
  • No Medical Loss Ratio Requirements
  • Uniform Regulations through ERISA

Consider these facts:

  • Employers have experienced a 36% increase in health care costs in the past five years, from $6,245 per employee in 2006 to $8,516 per employee in 2011, according to the 2011 Towers Watson/National Business Group on Health Employer Survey on Purchasing Value in Health Care. Meanwhile, employees have seen their share of the costs increase by 45%, from $1,834 in 2006 to $2,660 in 2011. Overall, costs have increased by 38%, rising from $8,079 in 2006 to $11,176 in 2011.
  • They estimate that seven years from now the annual cost for single coverage will double from its 2009 rate of $4,860, while the cost of family coverage will quadruple from its 2009 rate of $14,244.
Contact BRMS today to set up an appointment to learn more about how you can make the move.

If your plans are already self insured… CONGRATULATIONS! You have taken the first step to controlling rising health care costs. Let our TPA company show you additional tools and services to help you manage your programs, including the use of our online benefits administration platform, Vbas.

About Benefit and Risk Management Services

Benefit and Risk Management Services is a leading employee benefit administration and healthcare risk management TPA that is building trusted and valued relationships to reduce healthcare costs. Redefining the value of Third Party Administration with the most advanced technology solutions, BRMS helps over 400 organizations (including IT industry leaders, school districts, credit unions, hospitals, home builders and vineyards) control their benefit costs with advanced administration services, creative funding options and an innovative Web-based benefits administration system, Vbas that streamlines processes.

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