SELF FUNDED GROUP PLANS

Self-Funded group health is just that. Funded by the employer. Make any design you choose because the employer plan is not asking an insurance company to offer a plan and pay a premium for it. When the insurance company is not involved the employer has the freedom to tailor-make the plan as they wish but they need a TPA (Third Party Administrator) to administer enrollments and claims which the employer typically cannot do or doesn’t have the expertise to do. The employer pays a small fee per employee for the administrative services and the employer pays all claims out of their own cash flow. This is why self-funding is reserved for larger entities with good cash flow and strong reserves. The same effect can be accomplished by smaller firms by buying large deductibles such as $25,000 to $75,000 to pay the large claims a medium employer might not be able to handle with ease. You will need a competent advisor to analyze whether your firm is a good candidate for self-funding.