For many fully insured employers, the cost of health insurance continues to rise and is often the second largest expense, trailing payroll. The average annual cost per family is greater than $13,000 per year. Employers groups between 75 and 500 employees are suddenly faced with tough decisions due to the recent changes brought on by the Affordable Care Act.
Medium sized employers have very little control over the drivers of their fully insured premiums. They don’t know what claims they have or where their premium dollars are going. The lack transparency inherent in a fully insured plan prevents employers from implementing wellness initiatives to improve the health of their employees and reduce overall healthcare costs. The only certainty in a fully insured plan is the annual increases levied on medium sized employers.
Self funding is not a cure for the high costs of health care benefits. It is a strategy to help employers gain more control over their cost of providing health benefits to employees. Any self-funded health benefit plan must be coupled with a long-term commitment to reducing cost drivers.
If you are an employer with 75-500 employees, we invite you to learn more about the benefits of a self-funded plan.