Why You Should Consider Using A Self-Funded Health Plan For Your Business

Health & Medical Blog

If you own your own business, you have many options when it comes to health insurance. One of these options is a self-funded health plan. Below is information on what this is, as well as the benefits this type of heal plan offers you and your company. 

Self-Funded Health Plan

With a self-funded health plan, your company has full responsibility for health insurance when it comes to administrative costs and health insurance claims. As the employer, you will pay the insurance premiums for each of your employees that are on your health insurance plan.  

You are taking risks with this type of health insurance plan. For example, someone may go over a set threshold, resulting in much higher health care costs. To help with this, you can purchase stop-loss insurance. This type of insurance protects you if there are claims that exceed a threshold. There are two types of stop-loss insurance plans: aggregate or specific. An aggregate plan protects you if total claims go over the set threshold. The specific plan is if only a plan member goes over the set threshold. 

Benefits of a Self-Funded Health Plan

There are many benefits of choosing a self-funded health plan for your employees. It is much more flexible when it comes to customizing the health plan so it can meet your goals.  You may need to make changes if your company expands, and you need to hire a lot more employees. If so, you can easily make the changes yourself. 

If an employee puts in a claim and the costs are lower than what was expected, you will retain the funds to help you save money. If you have a standard insurance plan the insurance company would retain these funds. 

You also save money with a self-funded health plan. You will only pay minimal federal income taxes, which can get expensive. You also do not have to worry about risk or profiting margins that you would have to pay an insurer. 

You do not have to worry about meeting Affordable Care Act (ACA) requirements, and you will not be subject to mandates and state insurance laws. You will find it much easier to access the data that you need on your health insurance plan. 

Talk with a company that can provide you with a self-funded plan and they can explain to you in much more detail of what this is and the benefits it offers you. 

For more information, contact a local company like HealthEZ.

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28 June 2022

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