These days, it’s a pretty essential aspect of any good business or company that they provide health insurance for their employees. Since health insurance can be such a large expense for the average worker in the United States, having their employer offer insurance plans at a cheaper rate than what they would pay otherwise is a huge benefit.
For employers there is an added expense, but not offering insurance at all really isn’t an option in today’s work climate. Many potential employees may not choose to work for a company that doesn’t offer any form of health care coverage, and offering insurance shows that you care for and respect your employees.
Who Can Use Self-Funded Insurance Plans in Louisiana?
Self-funded insurance plans are available to any business who wants to choose them as a healthcare option. In the state of Louisiana, plans offered by major Insurance carriers meet all State and federal Guidelines for self-funded policies.
While self-funded insurance can have the added benefits of reducing costs and improving cash flow, it is often overlooked as an insurance option, particularly by smaller businesses. These policies were only available to large corporations which were able to pay claims out of pocket. Now the Insurance carrier handles everything. Part of your premium funds an escrow account to pay claims up to a stop limit, after that 100% of claims are paid by the insurance carrier. In the past, businesses without many employees might have struggled to opt for a self-funded insurance plan because the cost of paying out a claim could be too large of an expense.
However, there are now plenty of self-funded insurance plan options for smaller businesses, which allows those with very few employees to reap the benefits of a self-funded plan.
One such benefit making self-funded insurance more accessible to small businesses is stop loss insurance, which allows employers to reimburse their third-party company in the case of very large claims. Because of this, smaller businesses can now choose self-funded health insurance plans without worrying that an employee’s serious accident or illness will put them in a dire financial position.
No matter the size of your business or the number of employees that you have in your workforce, self-funded insurance plans are a great option for any employer. They can help to save you money and provide a flexible insurance plan for both you and your employees. If you are interested in learning more about whether a self-funded plan could for you, consult with a TPA or insurance expert.
The Benefits of Self-Funded Insurance
When choosing an insurance plan, the vast majority of businesses choose fully funded insurance, but that’s largely due to the fact that self-funded insurance isn’t a very well-known option.
Self-funded insurance differs from fully-funded insurance in that the employer takes on the financial obligation to pay out any claims, instead of paying them out through an insurance company.
Typically, a business with a self-funded insurance plan will have their employees pay monthly into a trust or fund that can be used should they need to pay out a claim. The employees might pay a percentage of their paycheck each month to the fund, which then collects interest and also avoids certain insurance taxes and regulations.
Some of the benefits include:
- More flexible than fully-insured plans.
- Partial or full return of escrow dollars not used
- Healthier Groups will pay lower premiums
- Lower cost
- Improved cash flow