You may be able to do it by self-insuring. It’s not just for “big business” anymore, says BLR’s Best Practices in Compensation & Benefits newsletter.
Doesn’t this phrase have a siren song, especially when it comes to healthcare coverage?
Just think about it. You take the premiums paid to your current health carrier and instead put them in your company’s bank account, where they earn interest and help your cash flow.
Then, when a claim comes in, you simply pay it … no time-consuming back and forth with the carrier, no indecipherable forms never designed for your business, no irate employees complaining about how their medical bills haven’t been paid yet.
What’s more, says Karin Landry of Spring Consulting Group, you don’t have to be Big Business, Inc., to self-insure. The program can be appropriate for companies with as few as 100 employees.
Landry’s views were recently reported in the BLR newsletter Best Practices in Compensation and Benefits. Published monthly, Best Practices in Compensation & Benefits is designed for any manager with comp and benefits responsibilities, and spotlights ideas that reduce what are often the biggest expenses in business.
In the article on self-insuring, Landry makes these key points:
–Healthcare self-insurance is proven. More than 50 million workers are covered under such plans.
–Help in converting is available. An actuary or other expert can analyze your specific situation to see if self-insuring will save for you.
–Self-insuring is legally simpler. Public carriers need to comply with complex state insurance requirements, but self-funded plans usually need to meet only federal requirements.
–You don’t need to administer the plan. Insurance carriers will happily sell you their administrative services separate from their claims underwriting. And many will customize those services to your desires. “If you wanted more intensive disease management than offered by the carrier,” says Landry, “you could spend extra and have that included.”
–Risk can be limited. Self-insurance can be limited to smaller claims. For anything major, you can purchase “stop-loss coverage” that kicks in after a threshold amount is reached, either on a single claim or on your total spending for the year. This is known as an “aggregate” plan.
Read the Full Article
To read the full article on self-insuring, click Product Sample below. You’ll see a sample issue of Best Practices in Compensation & Benefits, including case studies (two in each issue), Washington Watch legal coverage (including an important “FLSA Alert,”),and a Q&A section many readers rely on to answer their specific questions. There’s also a link to the complete index of what was covered last year.
Note also that BLR offers an opportunity to try two issues completely on us. If your job involves your company’s comp and benefits strategy, which many senior managers are realizing is THE strategy for staying profitable, you’ll want to see what this newsletter can do for you. To take advantage of this offer, click the link below and look for the button on the product information page that invites you to take a free trial.
And, by the way, if you do heed the siren song and try self-insuring health care, let us know how it went!
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