With the inflation rates soaring, medical costs have been hurting small businesses the most. Businesses are always looking for ways to combat costs, without negatively impacting health plan benefits offered to their employees. There is no one size fits all approach to lowering healthcare costs, but self-insurance may be an important strategy for small businesses to approach.
Partial self-funding or level-funded plans are self-insured plans designed for small businesses with five or more employees, with an opportunity to save money on the premiums while maintaining traditional health benefits for your employees. It’s an innovative self-insurance solution that offers potential savings plus protection through stop-loss insurance.
What can level funding provide for your business?
1. Opportunities for savings through receiving claims surplus
2. Risk management through stop-loss insurance
3. Greater control over plan design
4. Insight into claim costs
5. The flexibility to adjust their benefits and strategy
6. Elimination of many state-mandated benefits
7. Fixed monthly premiums
How does level funding or partial self-funding plan work?
The employer group makes a monthly deposit of a set amount (premiums) into a special bank account, out of which the plan sets aside funds to pay expected claims. Covered medical claims are paid from this bank account for the health plan. If covered claims are MORE than the specific and/or aggregate deductible, stop-loss insurance covers the balance. If covered claims are LESS than what was funded, the employer keeps the surplus! The employer will receive the full surplus or portion of the claims (depending on the contract selected) at the end of the plan year. Some health plans even offer a Guaranteed Surplus option.
What additional services are available within the plan?
Most level funding or partial self-funding plans offer a National network of providers including but not limited to doctors, specialists, hospitals, facilities, clinicians, counselors, psychologists and psychiatrists. Other than the plan implementation — plan documents, ID cards, summary plan description the administrator can offer:
1. HIPAA administration
2. Medical case management and utilization review
3. Anti-fraud services on health insurance claims
4. Subrogation service
5. Stop-loss reinsurance claims and reimbursement coordination
6. Stop-loss advances
7. Claim funding and banking services
8. Telemedicine service for members by phone or online app
How are rates determined under level-funded or partially self-funded plans?
An employer looking to self insure is provided a web-based employee enrollment portal which replaces a traditional enrollment form. Such a form captures the medical history of the employees enrolling in the plan. After review of all medical conditions, does the underwriter set rates for an employer group plan which includes allocations for claims, stop-loss premium and administration costs.
How can we help you?
To learn more about us, visit our website at www.njgroups.com or call us at 732 548 8700.
NJ Group Services is a distinguished leader in small group healthcare benefits. By offering flexible health plans, unparalleled personal service, innovative, paperless employee enrollment, comprehensive health and wellness management tools, nationwide network access, and seamless HRA administration, NJ Group Services is the choice to meet the diverse needs of small businesses today.