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Self-Funding 101

What is self-funding exactly? Simply put, self-funding is a cost-effective and flexible way to avoid the continually rising premiums of a fully insured plan. Self-funding allows employers to pay only for those claims that actually happen, rather than paying an insurance company a monthly premium for all the claims that might happen.

How does self-funding work? With the help of a Third Party Administrator (TPA) and trusted advisor, employers design health plans specifically for their employees. The TPA administers claims and provides access to a provider network along with a variety of other cost and risk management programs, similar to a fully insured plan.

To protect against excessive or unexpected claims, the employer can purchase stop-loss insurance. While many believe that fully insured plans are more prevalent, the truth is that three in five covered workers are in a self-funded health plan. Self-funding is common among many firms because they can spread the risk of costly claims over a large number of employees and dependents. In fact, 61% of all firms are partially or fully self-funded (Kaiser Family Foundation, 2016 Employee Health Benefits Survey) and over 100 million Americans receive their health insurance today through self-funded benefits (Self-Insurance Educational Foundation).

As one of the nation’s largest independent employee benefit administrators, CoreSource
offers the product options specifically needed for each employer’s self-funding needs, including:

  • Benefit Administration
  • Cost and Risk Management
  • Employee Health Optimization

Download our Self-Funding 101 Infographic for a quick look at the ins and outs of this valuable solution.

Posted on October 25, 2017 in Self-Funding 101

Tagged as self-funding