Self-Funding Frequently Asked Questions (FAQs)
What is self-funded insurance?
What types of organizations can self-fund?
What is the minimum size of an employer or organization to self-fund?
What types of health-related benefits can be self-funded?
- Prescription drugs
- Short-term disability
What rules cover self-insured benefits?
How do I protect my company from high claims?
What is stop-loss insurance?
What vendor relationships are available to assist businesses in self-funding?
- Third-party administrator to administer the plan. This may include implementing the plan design, bidding for stop-loss coverage, maintaining enrollment records, paying claims and working with the provider network and other vendors.
- Agent/broker to assess the employer’s needs and help find solutions.
- Provider network to negotiate discounts with doctors, hospitals and other health services.
- Stop-loss carrier to protect the employer from high financial claims.
- Wrap network to cover enrollees who travel or study outside the standard provider network.
In addition, employers may choose to use a:
- Pharmaceutical benefit manager (PBM) to negotiate discounts for prescription drugs.
- Health Savings Account (HSA) Administrator to administer accounts linked to high deductible health plans (HDHPs).
- Case management firm
- Disease management firm
- Wellness program vendor
- Care coordination firm
How do self-funded businesses develop an effective plan design?
- Customized benefits that meet the needs of the business as well as the workforce.
- Coverage and exclusions, which provide control over what is and is not covered by the plan.
- The plan’s relationship to larger goals for employee well-being. For example, a wellness-based plan may pay higher levels for preventive care if employees participate in a health risk appraisal.
- The role of health benefits in long-term strategy, which includes employee recruitment and retention needs
How do people covered by the plan know what is covered?
The Affordable Care Act (ACA) also requires self-funded plans to provide a shorter Summary of Benefits and Coverage (SBC) that is drawn from the SPD. There are specific requirements for the length, contents and format of the SBC.
What is The Alliance role in self-funding?
- The Alliance is a better way for self-funded businesses to buy health care. We offer:
- Broad choice of doctors and hospitals.
- Tools for employees to make informed health care decisions based on cost and quality.
- Information and guidance to help employers manage health benefits.
- The Alliance unites businesses and other organizations as purchasers of health care to drive market change. We provide:
- Payment and purchasing redesign leadership, pilot programs and expertise.
- Health policy advocacy.
Want to network with executives and human resources leaders from other self-funded businesses to find out how it really works?
Attend an Alliance Learning Circle. Learning circles offer presentations from national and regional experts on topics that are crucial to the performance of your health benefit plan, such as compliance, cost savings and the latest trends. Alliance Learning Circles are typically scheduled five times a year.
To get your invitation, contact:
- Mike Roche
Member Services Manager