Benefits

A self-funded plan can solve the employer’s as well as the employees’ problem related to the cost-effectiveness of healthcare insurance as it has the following benefits over traditional healthcare insurance:

• The employer can customize the plan to meet the specific health care needs of its workforce, as opposed to purchasing a “one-size-fits-all” insurance policy.
• The employer maintains control over the health plan reserves, enabling maximization of interest income – income that would be otherwise generated by an insurance carrier through the investment of premium dollars.
• The employer does not have to pre-pay for coverage, thereby providing for improved cash flow.
• The employer is not subject to conflicting state health insurance regulations/benefit mandates, as self-insured health plans are regulated under federal law (ERISA). 
• The employer is not subject to state health insurance premium taxes, which are generally 2-3 percent of the premium’s dollar.
• The employer is free to contract with the providers or provider network best suited to meet the health care needs of its employees.