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Choosing the right type of health plan is a crucial part of the growth and long-term success of any business. However, many employers are confused about the differences between self-funded and traditional health insurance.

With a traditional or fully-insured plan, a company pays a monthly premium. The premium is fixed and is based on the number of enrolled employees. In this case, the insurance company assumes the risk.

Self-funding is an alternative method of providing employee health care benefits in a way that offers significant opportunities to control benefit costs. With self funding, a company is responsible for paying for its own medical bills directly and a Third Party Administrator (TPA), like PHP TPA Services, performs tasks such as processing claims and issuing ID cards. Through plan design, benefit offerings, and wellness initiatives you can contain costs and offer your employees attractive health benefits. Self-funding allows cash flow to work to your advantage, rather than that of an insurance company or benefit provider.

Why consider self-funding?

In short, you have more control, lower taxes, improved cash flow, less regulations, and plan flexibility with a self-funded plan.

Increased Financial Control

With self-funded plans, employers have the advantage of using their money for funding claims only when they are due rather than continually funding an insurance company through premium payments. This allows the employer to have greater control over funds that would otherwise be held by their insurance carrier in various reserves, such as unreported claims and pending claims.

By funding claims directly, an employer avoids the insurers’ costs of claim reserves, administrative costs, profit margin, risk charges, premium taxes, and contingency margins—basically, you're cutting out the middleman and likely saving money because of it.

Plan Flexibility

Self-funded plans allow employers ultimate flexibility in designing their own health benefit plan. Because self-funded plans are exempt from state insurance laws, employers have more control over where their claim dollars are being spent as opposed to insurance carriers who are tied to a variety of laws and restrictions. This allows employers to pick and choose plan options based upon their values, budget, and strategic planning objectives.

Utilization and Plan Management

The design flexibility and ongoing expense analysis of self-funded plans allows employers to continuously make the plan design changes that they need in order to manage their costs effectively. Self-funded plan designs can even include strategies to monitor use and assure appropriateness of care for inpatient and outpatient services, all while maintaining the benefit of discounts from a variety of network partners.

Information Management

In a self-funded plan, employers have secured access to all of the information needed to manage their plan effectively. Authorized individuals will have access to confidential monthly reports and benefit-related information and insured clients will have access to their eligibility, claims, and reporting system through our encrypted website. This allows employers to have greater time control and use of their plan's data.

I'm convinced. Now what?

If you're interested in a self-funded plan and ready to take the next step, we encourage you to contact PHP TPA Services, to get started on creating a customized health plan just for you. Why PHP's TPA you ask? Here are just a few reasons:

  • PHP is an experienced third party administrator with extensive local market knowledge.
  • We can help you design the plan you are seeking to meet employee health needs and suit your bottom line.
  • You'll have access to a dedicated account manager to handle your business needs.
  • You'll have access to a live, local customer service team.
  • Claims administration will take take of your HR needs, plan communication, and ID card distribution.
  • We offer contracted utilization review and medical management cost savings programs.
  • We are technology, HIPAA, and compliance driven.
  • We offer value-added services and wellness initiatives to keep your employees on the job and engaged in their own well-being.
  • Our clients have access to experienced sales management and service-oriented claims payment operations.
  • You will receive guidance on compliance demands, actuarial resources to provide specific guidance based upon available plan data.

For More Information:

Lon Springer
Senior Account Executive, TPA Services
lspringer@phpni.com
1-800-551-7334

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