Self funded health insurance vs traditional employer health plans

Self funded health insurance vs traditional employer health plans


Alright, this morning we’re talking to
Rex Snyder, who’s our consultant on level self-funded plans here in the US, and so
thank you for joining us Rex! Great to be here. What’s your question, Mark? Yeah, so can you explain to us a little bit more the concept of level self-funded plans
compared to fully insured plans? Will you pull that slide up? Let’s take a
look at that right now. Okay as you can see on the slide
here, we have self-funded on one side and fully insured on the other. Fully insured
plans are all subject to ACA laws and regulations. So let’s start through the
list. The first thing is, they’re subject to age and gender ratios. What
that means to the employer is, he’s seeing a significant increase in the rates for
his younger people. He actually might see a little bit lower rate for some of the
older people but overall because things like maternity are added in on males
even, on ACA plans, self-funded plans have better premiums. We are not subject to
age or gender ratios like that, we do not have to put maternity on young males,
and so overall, lower rates for the self-funded plan. Fully insured plans are
all subject to the metallicized requirements. Their gold plans and silver
plans and bronze plans, and the employer has to pick from those designs. Our
self-funded plans are free to be designed the way that works the best for
the employer, for the employees. Typically we tell the people is if you can
think of it, we can do it. Different deductibles, different co-pays, different
networks, we can do that for them. Funds on a fully insured plan are pooled, okay, when in other words, claim fines are pooled, and if the groups on the ACA plans are very healthy, which is unlikely
since they’re guaranteed issue, that money goes to the profits of the
insurance company. On the other hand, on self-funded, your claims are looked at on
an individual basis, and as we’ve talked about, about forty percent of every
premium dollar that you send in is set aside to cover claims. Your claims, and
not somebody else’s. So if your group performs better than expected you can
expect to see that money coming back to you, the employer, at the end of the year.
That’s a significant savings. Now, renewals, same thing, since ACA
business, ACA business, is guaranteed issue, experience is showing that claims
are significantly higher on those plans then under the self-funded. Yes we do ask
a few medical questions, but we want to know for sure if self-funding is right
for you. Last but not least when you compare
these plans, they have made a big thing on the ACA plans that there are wellness
benefits. Well, the good news is self-funded plans
have wellness benefits as well, and we’re capable of designing those benefits to
work best for the employer. We can do things, like teladoc, telemedicine, which
saves employees the trouble when their child is sick, having to go into the
office just to have a doctor say “here’s a prescription, get it filled.” We can do
those kind of things on wellness, we can do those kinds of things on sickness.
Great savings of time and money to the employers. That’s pretty much it, Mark. Well thank you, Rex. I appreciate that, great information, and I’m sure we’ll be having people contact you. Thanks for
being here.

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