Category: Health and Benefits

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Health and Benefits

Self-Funded Medical Plan Advantages

Self-Funded Medical Plan
Doctor typing information on Laptop in Hospital office focus on Stethoscope

As health insurance premiums rise, businesses are exploring other options for providing healthcare to their employees. As a result, many businesses are choosing to forego traditional group health
insurance plans (fully- insured plans) and are adopting alternative programs, such as self-funded medical plans (self-insured plans). A self-funded medical plan can mitigate the problem of increasing insurance premiums and help to reduce employee healthcare costs.

In 2000, about 48% of all employers self-funded their employee healthcare coverage. By 2015, the percentage of self-funding employers had eclipsed the 60% threshold and is expected to continue to grow at a significant pace. Today, more than 80 million people – 60% of all workers under the age of 65 – are covered by self-funded employer health plans. Given the rising cost of healthcare, and the complexities associated with compliance, more employers are likely to explore self-funding as an option to lower or offset the cost of healthcare delivery to their employees.

There are many advantages to a self-funded medical plan compared to fully-insured medical plan. To read about the benefits, CLICK HERE for our client friendly flyer.

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Captive Insurance Health and Benefits

Medical Plans with Stop-Loss

medical plans
Sthethoscope and medical documents

An employer that self-funds its medical benefits plan needs stop-loss insurance to protect it from larger than expected claims, whether for a single employee or its entire workforce. With stop-loss insurance, an employer will not be responsible for claims in excess of certain pre-set limits for the policy year. Once claims exceed these limits, the stop-loss carrier assumes the liability.

There are two types of stop-loss insurance:

Specific Stop-Loss Insurance, sometimes referred to as “individual stop-loss insurance”, protects an employer in the event that a single employee has larger than expected claims. This type of coverage reimburses the employer for claims made by an employee in excess of the policy’s per-employee deductible.

Aggregate Stop-Loss Insurance protects an employer from high claim volume. This type of coverage reimburses the employer in the event that the total claims of all employees exceed an overall deductible for the policy year.

While self-funding a medical benefits plan may make sense for a particular employer, stop-loss insurance is critical to protect the employer from catastrophic claims. If even one employee gets cancer or has surgery, the cost to the employer that self-funds medical benefits can be hundreds of thousands of dollars. This could be devastating to a small business. Stop-loss insurance protects the employer from such claims. With stop-loss insurance, an employer knows that its total cost cannot exceed a pre-determined amount.

To get a quote on Medical Stop-Loss, CLICK HERE for the application. For information on how to get a quicker and more accurate quote, CLICK HERE. Please email the completed application and all other required information to [email protected]. If you have any further questions, call RMC Group at 888.599.5553.

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Health and Benefits

Self-Funded Medical Plans with Stop-Loss

Self-Funded
pretty african medical nurse

Employers have a choice in how they fund their medical benefit plans. One choice is a fully-insured arrangement. In a fully-insured arrangement, the employer pays a fixed monthly premium to an insurance company. In exchange for this fixed premium, the insurance company assumes the cost of medical care provided to the employer’s employees. If actual claims are lower than expected, the insurer keeps the difference. If actual claims are higher than expected, the insurer pays the difference.

A second option is a self-funded plan, which is the most widely-used form of managing employee healthcare coverage.  In a self-funded arrangement, medical costs are paid by the employer. The employer typically pays a fee to a plan administrator, who performs functions such as claim processing and securing discounted services from health care providers. The employer takes on the risk of claim fluctuation, paying the actual claims incurred by enrolled employees and their dependents.

Any employer that chooses to self-fund its medical plan needs stop-loss insurance.  Medical stop-loss insurance protects an employer from unexpected claims, whether from a single employee or its entire workforce. Under a stop-loss insurance policy, the employer is not responsible for claims that exceed certain pre-set limits for the policy year. If expenses exceed these limits, the stop-loss carrier assumes the liability.

There are generally two types of stop-loss insurance:

Specific Stop-Loss Insurance, sometimes referred to as “individual stop-loss insurance”, protects against large catastrophic claims. The coverage reimburses the employer for any qualifying claims, made by an employee or dependent, that exceed an individual deductible for the policy year.

Aggregate Stop-Loss Insurance protects against high claim volume. The coverage reimburses the employer if the total claims of all employees exceed an overall deductible for the policy year.

Stop-loss insurance is critical to protect a company’s finances. Because events such as cancer treatment or surgery can cost hundreds of thousands of dollars, the potential for financial devastation is great. At the very least, they can cause a serious strain on cash flow, particularly for smaller firms. That’s why it’s so important to get stop-loss insurance.

For more information on this topic or to learn how to get a quote, join our webinar on February 7, 2018, with Ryan Mitchell and Stephanie Strauss. CLICK HERE to register.