Self Funding Group Health Plans
In addition to the risk management approach of fully insuring group insurance plans, whereby employers pay fixed premium regardless of claim activity, self-insurance can provide an alternative vehicle to providing employee benefits.
Although traditionally an approach used mainly by mid and large-sized firms, self-funding group health plans can provide a viable option for smaller employers as well. Determining the appropriate funding method is critical to optimizing the value of an employer's benefits program. Potential advantages of self-funding varies across employers, but primary examples are provided to the right.
However, self-funding group health programs is not a fit for all employers. The main disadvantage of self-insurance is the financial risk of paying claims and the accompanying risk management challenges. The financial risks are driven by the unpredictability of claims over time.
For more than 25 years, Grooms Benefit Solutions has provided expert consult on developing and managing self-funded group health plans. We can provide employers with a detailed assessment to determine if this is the best approach to fund an employer's group health program.
If your firm has not considered self-funding in the past, now is the time to explore an alternative funding solution.