Future of Small Business Insurance - Self-Funded Health Insurance Plans

The best health insurance companies have made choosing small business health insurance increasingly simpler and easier. Small business owners now have instant access to big name insurance carriers such as Aetna, Blue Cross Blue Shield, United HealthCare, etc. Self-funded health insurance is becoming one of the most widely utilized health insurance plans small business owners have adopted.

Self-funded plans are now gaining popularity for businesses with 10-100 employees. New plans include:

  • Savings of up to 20 percent for some groups
  • Opportunity for a credit refund at end of plan year
  • Predictable monthly payments
  • Professional service for claims and payments
  • Broad provider network

Self-funded insurance plans give the business owner control over the distribution of benefits and also provides the employer with the flexibility to design an individualized health insurance benefit plan.

One major factor that has been designed for small businesses using self-funded health insurance plans, is the monthly accommodation. Employers that make use of this are required to pay maximum costs for the plan on a monthly basis. If claims exceed the amount the employer set aside to pay in any given month, the insurance company advances that particular amount of money and allows future premium payments to credit back the amount of money advanced.

The monthly fee employers pay will include:

  • A maximum claims amount based on the health of employees
  • An administration fee that covers the cost of claims processing and care management
  • A stop-loss premium covering the cost of insurance on higher-than-expected claims

Self-funded plans are not subject to state laws and regulations. This simply means that state-mandated benefits, state prompt payment rules and standards of network adequacy do not apply. These plans are regulated under federal law.

Other beneficial features of self-funded health insurance plans include:

  • It is designed as a pay as you use plan, this plan lets you pay for only the health care that you make use of and nothing more
  • You get the excess claims as a refund at the end of the year
  • For costly and unexpected claims, stop-loss insurance kicks in

Self-funded insurance plans offer a high level of flexibility and customization, allowing small businesses to select from an array of benefit plan configurations and administration options. These plans are a great option for smaller businesses that need relief from rising health insurance costs.