Self-Funded Health Insurance Meets Fully Insured Health Insurance:
Hybrid Funding Gives Your Company Better Health Insurance Rates Without the Risk!
Self-funded health insurance plans (aka self-insured plans) have been available to “big business” for decades, but the risk of a large claim, a wide variance in month to month plan cost, and regulations, have prevented the small employer from stepping into the self-funded arena.
Fully insured group health plans have offered consistent plan payments and peace of mind for companies and organizations with less than 50 employees for years. An employer pays a level plan premium each month and the insurance company pays the policy benefits. Prior to 2014, a small employer with healthy employees benefited from lower health insurance costs since incurred claims was a major factor in determining rates. Lower claims meant lower rates.
Fast forward to 2014 and the Affordable Care Act with community rating for the small employer. A healthy group with relatively few claims was given the same rate as a group with high claims. No matter what a group did to improve employee health, the rate would be the same. Healthier groups paid a lot more for their health insurance; groups with a high claim experience paid a lot less.
- What if there was a better way?
- What if an employer with a healthy workforce could share the medical risk with the insurance company in exchange for a possible refund at the end of the year?
- What if those plans would qualify as self-funded and be exempt from certain ACA taxes and fees?
- What if the plans offered consistent premiums and limited claim liability?
A change in North Carolina insurance law in response to the Affordable Care Act’s community rating now allows employers with as few as 26 eligible employees to purchase a self-funded health insurance plan. To address the challenges of self-funding for the small employer, insurance companies have responded with hybrid funding plans, combining the best features of self-funded and fully insured health plans.
- The plans have level premiums for the entire 12 months of the plan year, just like a fully insured plan. The premium pays for plan administration, reinsurance and expected claims funding.
- Reinsurance is included to cover claims if the amount allocated for expected claims funding is exceeded. Under this scenario, there is no additional cost to the group.
- If the group has a favorable claim year with claims less than expected claim funding, the group shares the excess funds with the insurance carrier. Under this scenario, the group would get money back.
- Since the plan qualifies as self-funded, the employer has access to claims data. This helps the employer respond to new trends, focus on health and wellness, and enjoy the flexibility in plan design.
Hybrid funded health insurance plans were created for small employers with healthy employees who want to save money on their group health insurance plan without sacrificing benefits. These hybrid funding health insurance plans go under several trade names and are offered by all the health insurance giants in North Carolina – to small employers – with as few as 26 employees!
Discover the hybrid funded plans offered by the following four health insurance giants here in WNC, in alphabetical order: Aetna, Blue Cross NC, Cigna, and United Healthcare.
Aetna: Aetna Funding Advantage®
Aetna Funding Advantage® is Aetna’s partially self-funded health insurance for small business.
Benefits of Aetna Funding Advantage:
- Opportunity to save up to 25%* upfront
- Fixed single monthly payment that remains stable through the year
- Access to the vast Aetna provider network
- The unique funding structure returns 50 percent of any surplus at year-end to you when you renew your plan
- Options to pay higher monthly amounts in return for getting back claim surpluses at termination
- Protection against claims that are higher than anticipated through stop loss insurance
- Financial protection, predictability, cost savings, and transparency through reporting
- Turnkey administration by Aetna
- One consolidated platform
*Savings based on choosing an Aetna Funding Advantage plan over an ACA community-rated plan. Actual cost savings vary by location and previous claims experience.
Enjoy the benefits of partial self-funding that’s traditionally offered to larger companies – now available to your small business! Cost savings – without the risk!
Call WNC Health Insurance – experts in small business health insurance since 1994. 828-681-8223
Blue Cross and Blue Shield of North Carolina (Blue Cross NC): Balanced Funding
Enjoy the advantages of partial self-funding, and the stability of full coverage!
Small businesses like yours traditionally had only two choices of group health insurance for your employees:
- Fully Insured – the low-risk option with predictable monthly fees; or
- Self Fund your coverage, giving you greater control at a potentially lower cost.
There is now a third option! Balanced Funding!
Benefits of Balanced Funding:
- The savings that can come from self-funding
- Predictability similar to a fully insured plan
- Money back when you have a positive claims year (as much as 67% can come back to you)
- Access to the vast Blue Cross NC provider network
- Stop-loss coverage protects you against extraordinary claims levels
- Outstanding claims processing
- Great flexibility in meeting your employees’ needs
- Mitigate your risk – you can terminate at any time without further claim liability
- More control than fully insured plans
- No deficit carry-forward
- Turn-key administration by Blue Cross NC
- Face fewer state and federal regulations and fewer ACA regulations
Talk to the experts in balanced funding at WNC Health Insurance – small business health insurance consultants since 1994. Call Now: 828-681-8223
Cigna: Level Funding and Graded Funding
Cigna is a pioneer in creating self-funding options for companies with fewer than 250 employees. Their self-funding solutions give companies the opportunity to understand and better manage health care expenses and save money when claims are lower, as well as stop-loss insurance protection for unexpected large claims.
There are two self-funding options:
- Level FundingSM – Financial predictability of fixed monthly payments. Plus, you can potentially receive a credit to put toward future health plan costs, if actual claims are lower than expected at the end of the year.
- Graded FundingSM – You can pay as you go for actual claims. If claims are lower than predicted, your business can save. If claims are higher than predicted, stop-loss insurance can limit your company’s financial exposure.
Choosing to implement a self-funded health plan should not be taken frivolously. However, cost-savings could be very substantial, so take the opportunity now to learn more!
It is very important to perform a risk flow and cash flow analysis to be able to determine whether your company is ready to self-fund. Whatever decision you want to make, ensure you have an expert employee benefits agent to tackle this strategically smart venture.
Talk with THE expert employee benefits agents: WNC Health Insurance – small business health insurance consultants since 1994. Call Now: 828-681-8223
United HealthCare: All Savers Alternate Funding
United HealthCare’s funding plans were built with small businesses like yours in mind. Did you know that 60 percent of small business employees spend less than $1,500 a year on health care? It’s often for things like ear infections, broken bones, or routine checkups. But since employees are not meeting their deductibles, they end up covering most of their medical costs out of their own pocket.
UHC’s All Savers Alternate Funding is a self-funded health plan designed specifically for small businesses. It includes three parts:
- Your self-funded medical plan, which pays covered medical expenses of your covered employees and their dependents.
- A third-party administration agreement between you and United HealthCare Services, Inc. for claims processing, billing, customer service, and other administrative services.
- A stop-loss insurance policy by All Savers Insurance Company, which protects the plan from large catastrophic claims by a covered individual, and provides overall protection in the event that all claim payments made under the medical plan exceed a certain dollar limit.
All Savers Alternate Funding is a “level-funded” plan, so you’ll make the same monthly payment throughout the plan year. It is not subject to most state mandates and state insurance-premium taxes. This may also mean lower costs throughout the year. In addition, you’ll have the chance to get some money back at the end of the year.
Discover how United HealthCare’s All Savers Alternate Funding can help you! Click Here
BerniePortal HR Platform
Business Owners and C-Level Executives: BerniePortal makes all of the following much easier for you and your HR manager:
- New Hire Onboarding
- Benefits Administration
- Health Insurance Integration
- 1094-C/1095-C Compliance
- Time & Attendance
- PTO Tracking
- Payroll Integration
- Compliance Notices
- Consolidated Billing
BerniePortal is a leading all-in-one online HR software platform that helps small and medium-sized employers solve the transactional challenges of HR (including benefits and health insurance) easily – on the Internet.
- Manage all paperwork, notices, enrollments, etc. at-a-glance – all in one place.
- Automatically generate the forms that new hires must fill out.
- Employees can sign forms online – it’s a legal signature.
- Edit new-hire to-dos, i.e. employee agreements / handbooks / emergency contacts, etc.
- Utilize propriety health insurance carrier form mapping technology.
- Simplify open enrollment and improve benefits communications.
- Reflect your organization’s brand on all portal webpages.
- Attract great talent by executing more benefits strategies and robust funding options.
- Enjoy this online bundled experience – a high-end technical solution.
Contact us today and discover BerniePortal for yourself. Call us now: 828-681-8223