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Why Self-Fund
Self-Funded vs. Fully Insured
Traditionally, employers have used fully insured health plans to manage their health benefits. However, in today’s regulatory climate, self-funding benefits have become a very attractive alternative. In fact, 61% of covered workers today are in a self-insured plan. (Employee Benefit Research Institute 2019).
With self-funded health plans, employers fund their own health plan through the assistance of a third party administrator (TPA) like BPA.
The advantages of self-funding with BPA:
Greater financial control
Employers with self-funded plans fund claims as they are incurred rather than funding them through advance premium payments. This means you are in control of your claims money rather than an insurance company.
Lower Costs
Entering into a self-funded plan lowers the overall cost of the program. This is accomplished by avoiding the premium charges found in a fully insured program. These costs can be as high as 10 to 30 percent of the gross premium.
More flexibility
Self-funding makes it possible for employers to customize a health plan to address the specific needs of their workforce. Self-funded plans are also exempt from state insurance laws that typically mandate certain benefits for fully insured plans.
Cost management
Plan design flexibility and on-going analysis of expenses keep employers in the driver’s seat of their benefits plan. BPA’s self-funded plan designs include strategies that monitor the costs associated with quality of care, and encourage healthy lifestyles; all with the goal of reducing healthcare spend.
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