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Is Self-Funding for You?

Piggy bankYou Can Self-Fund

A growing number of businesses and insurance trusts are proving that a self-funded health insurance plan can be a cost-effective alternative to the traditional fully-insured approach.

When you self-fund, you are taking on the responsibility – as well as the risk and rewards – of paying the medical and prescription drug claims of enrollees.

Three out of five covered workers in the U.S. are covered by some type of self-funded medical plan.

4 of 5 people
3 of 5 people

Among employers with 200 or more employees, that jumps to four out of five employees.

Comparing Self-Funding and Fully-Insured Approaches

Self-Funded

Active Human Resources role; often have an internal benefit administrator

Craft plan design and pick provider network

Pay claims via a third-party administrator (TPA)

Purchase stop-loss coverage

Active review of claims activity

Employer crafts plan design, co-pay, deductible, etc.

Plan must meet federal (ERISA) standards

Employer chooses provider network

Full access to claims and pharmaceutical data.

Fully-Insured

Minimal administrative role

Plan design and provider network come from the insurer

Pay premiums

Higher fully-insured premiums cover the risk and generate profit for the insurance company

Plan and premiums revisited annually or when term ends

Employer is limited to insurer’s plans that were filed with and approved by the state.

Plan must include state mandates

Plan design and network determined by insurer

Limited access to claims data

What You Can Gain

With self-funding you get:

With self-funding you get:
Control Access to Data Cost Management Flexibility Strategy

Control

tools

You make the big decisions about employee benefits, including benefit levels, co-pays and deductibles.

Access to Data

pie chart

You own your data. You can use it to manage your plan and guide your decisions.

Cost Management

The insurer's profit margin is eliminated, so you gain the rewards of a well-managed benefit plan.

Flexibility

flexibility

You can design a plan to match the needs of your employees and your organization. Self-funded plans are governed by federal rules, not state mandates, so one plan design can be offered in many states.

Strategy

bullseye

You choose what steps to take to get more health – and better health care – for your money.

Click the chart for details!

Self-funded benefits for 75 – 250 employees?
It’s simple.

Single Source self-funding the allianceSingle Source Self-Funding from The Alliance is designed for employers who are self-funding for the first time. Single Source Self-Funding creates a seamless transition from fully-funded to self-funded benefits with a package of essential services. A self-funding best practices blueprint and a dedicated implementation team smooth your way to self-funding success. Learn more here.

Is Self-Funding Right for You?

Business Voice July 2016

Answering 10 questions can help you decide. Read the Wisconsin Business Voice article written by Cheryl DeMars, president & CEO, The Alliance.

More Information About Self-Funding

Online documents

The Alliance annual offers courses and webinars on basic and advanced self-funding topics. Check our events section or email us a thealliance@the-alliance.org to learn more.

The Self-Insurance Institute of America (SIIA) offers resources and answers your questions about self-funding.

Who Can Self-Fund?

Self-funding is an option for businesses, municipalities, school districts, unions, Taft-Hartley insurance trusts and other organizations. Get a picture of what self-funding means – and who is using it – with our infographic. Businesses in a wide variety of industries can benefit from self-funding.

Alliance Members by Super Sector

Manufacturing - 27% Wholesale Trade - 11% Retail Trade - 8% Finance and Insurance - 7% Professional, Scientific and Technical Services - 7% Educational Services - 6% Construction - 5% Health Care and Social Assistance - 5% Other Industries - 23%

Manufacturing - 27%

manufacturing-alliance-self-funding

Wholesale Trade - 11%

trade-alliance-self-funding

Retail Trade - 8%

retail-trade-allaince-self-funding

8%

Finance and Insurance - 7%

money-alliance-self-funding

Professional, Scientific and Technical Services - 7%

prof-services-self-funding

Educational Services - 6%

Construction - 5%

construction-alliance-self-funding

Health Care and Social Assistance - 5%

health-alliance-self-funding

Other Industries - 23%

partial-key-members-supersector-

Alliance Lives by Super Sector

Manufacturing - 34% Educational Services - 15% Public Administration - 11% Retail Trade - 9% Health Care and Social Assistance - 6% Finance & Insurance - 6% Wholesale Trade - 5% Other Industries - 10%

Manufacturing - 34%

manufacturing-alliance-self-funding

Educational Services - 15%

Public Administration - 11%

Retail Trade - 9%

retail-trade-allaince-self-funding

Health Care and Social Assistance - 6%

health-alliance-self-funding

Finance & Insurance - 6%

money-alliance-self-funding

Wholesale Trade - 5%

trade-alliance-self-funding

Other Industries - 10%

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