3 Self-Funding Misconceptions
“My company is too small to make a self-funded program worthwhile”
Most stop-loss carriers require a minimum of 51 participants in order to write a policy. If you have over 75 employees, we think its especially worthwhile to look into this mechanism of self-funding.
“We can’t manage the extra responsibilities of a self-funded plan”
With an active and informed consultant and the right third-party administrator to help create the proper health plan infrastructure, all the leg work is done by people and parties operating in your best interest.
“My company could be liable for a huge amount of money if we have a bad year”
Stop-Loss insurance is put in place on self-funded plans to limit the liability the employer may be exposed to, which caps a company’s liability within the policy period. There are 2 types of stop-loss insurance to know about:
- Specific Stop-Loss- This type of stop-loss insurance is used to protect against catastrophic or abnormal claims against a specific individual. Set using a specific deductible and coverage paid through set monthly premiums, you as an employer cap your liability at the specific stop-loss deductible granted.
- Aggregate Stop-Loss- Looking at the whole group rather than each, specific individual. If the projected claims exceed 100%-125% of the expected annual claims of the whole group, money paid out is reimbursed by the stop-loss carrier. This coverage is also paid for through set monthly premiums.