The keys to a successful Self-Funded Health Plan
For many companies and groups, the most cost effective approach to providing health care benefits is to establish a Self-Funded Benefit Plan. These plans have three critical components:
1. Your TPA (third-party administrator)
Your Third-Party Administrator will help you understand the basics of self-funding, as well as secure reinsurance and effectively coordinate all the program elements for your company.
They will provide the strategic planning required to make your benefits program run smoothly and save your company or group money. You should expect your Third-Party Administrator to provide information on establishing and maintaining adequate program funding and contribution levels based on cost projection models based on your company’s history.
Your Third-Party Administrator will advise you on program design and customization including developing your specific benefit offerings, health incentives and other elements that will help control health care costs.
Your Third-Party Administrator should offer a broad portfolio of administrative services and perform all the needed administrative tasks to keep your benefits program functioning smoothly.
2. Unexpected or Catastrophic Claim Coverage
In a self-funded benefit plan, insurance is used to cover certain situations and reduce a company’s overall financial risk. This insurance is often referred to as re-insurance or stop-loss. There are countless re-insurance arrangements and options. Your Third-Party Administrator can provide you with information about stop-loss insurance. Third-Party Administrators can shop the open market for the most competitive stop-loss rates, review those options and make recommendations on the best course of action.
3. Customizable Plan Components
The final critical element of a self-funded benefit plan is actually a combination of customizable plan terms and components. A well qualified TPA will facilitate plan customization to meet the specific needs of the Plan. Such arrangements include having the ability to place a pharmacy benefit manager (PBM), provider agreements and network agreements, and integrated care management and utilization review services. The ability to combine these components with specific contract arrangements, terms and language provides a great advantage to plans and their sponsors.
A Self-Funded Benefit Plan is often the best solution for companies and groups. With the right TPA Partner, you can provide your employee with enhanced benefits and still control health care costs.