What is Self Insurance (aka Self-Funded Insurance)?
A self-funded health plan provides a variety of benefits. But what is self insurance?
In a self-funded benefit plan, an employer pays monthly fixed costs (administrative fees and premiums for stop loss administration) as well as the cost for members' medical claims. Claims costs vary based on plan utilization. Claims expenses are the largest portion of plan cost in a self-funded arrangement. A third party administrator should manage both plan cost and health care outcomes.
Employer health insurance and benefit plan solutions, products and services selected based on demographics, industry, group size, claims experience, plan design, risk tolerance, and variability in cash flow ensure a high-performing benefit plan that balances the bottom line and employee health and wellness.
- Slide 1 - by plan type
- Slide 2 - by firm size
- Slide 3 - by region
- Slide 4 - by industry
- Slide 5 - level funding
Why Choose Self-Funding?
Self-insured plans allow your company the flexibility to design a plan that fits your unique needs and the opportunity to take greater control of your health care dollars. Most plans elect to partner with a third-party administrator (TPA) for administrative services, medical management support, reporting and holistic health plan performance management. Nova works with third-party stop loss insurance carriers to protect plan sponsors from high-cost claimant exposure. It's possible to provide quality employee benefits while also managing employee contributions and overall cost.
How do Self-Funded Plans Work?
Your situation is unique - your health plan solution should be too. In a self-funded arrangement, employers customize their plan designs to meet the specific health care needs of their employees following federal regulations. This eliminates the need to manage plan offerings based on state mandates. The addition of stop loss insurance protects plans from catastrophic medical claims. Still on the fence about making a switch to self-funding? Make the process work for you and be sure you're asking third-party administrators the right questions ..we can help.
Funding Options & Financial Risk
With fully-insured employee benefit plans, employers pay a predetermined premium for each enrollee on a monthly basis; that premium is paid whether or not enrollees actually receive services. With self-funded plans, an employer applies a pay-as-you-go approach, paying claims expenses as they are incurred by members on an established schedule. Most plan sponsors purchase stop loss insurance to mitigate risk. Nova partners with best-in-class stop loss vendors to support our clients' plan needs. It's helpful to understand the difference in plan funding when selecting the solution that's right for your plan.
There's More to Self-Funding Than Saving on Administrative Costs
We aren’t just another third-party administrator — we’re part of your team.
We handle the administrative services you’d expect from a TPA including in-house medical management and plan analysis to mitigate financial risk and improve health plan trends.
And, you're not on your own to figure it all out. Nova embraces the flexibility a self-funded health plan provides, including partnerships with best-in-class vendors to help our clients maximize their plan performance. Watch the video to learn how self-funded benefits could benefit your business.
"From the beginning of our relationship with Nova, we have been impressed with the level of knowledge around self-funded health plans, stop loss insurance, reference based pricing, repricing vendors and general implementation."
- Ash Group, LLC