How do you know which clients are ready for the discussion? Here are five questions that can help your client determine if the appetite and capacity for self-funding exists:
1. Are you willing to take on risk or would you prefer to pay a known monthly premium? Going self-funded can often be unpredictable, so clients will need a certain readiness to absorb monthly fluctuations in claims. The stability in a fully insured arrangement typically offsets that fluctuation, with more reliable fixed costs as the tradeoff for potential savings.
2. Would you like the ability to customize your plan design based on your specific employee needs or would you prefer to select from a standard plan offering portfolio? Going self-funded allows employers more freedom to customize benefits. Working together with our account team, you can develop a plan that suits the unique characteristics of your employer client.
3. Is your organization fully engaged in wellness? Self-insured companies have a vested interest in improving employee health and understand that wellness is indeed a business strategy. Exploring the potential benefits of workplace wellness will reveal powerful and effective tactics for self-insurers.
4. Would you like more access to detailed data and analytics on a regular basis to assist you in creating a multi-year strategy? All employers have access to their own trend and usage data. But self-insured clients can get more robust and specific information. This data, used to analyze metrics or forecast trends, is invaluable to understanding a health plan’s costs. It also gives self-funded employers insight into various risks, allowing them to make financially sound plan and coverage decisions.
5. Are you projecting substantial growth and hiring over the next 5-10 years? Claims volume and costs are inherently volatile from year to year, and spreading the risk over a larger, growing employee population can help lessen the impact. We can help you to assess your clients readiness to take on this unpredictability.
Brokers play a central role in this important discussion and can be a critical influence on this decision. Your partners at BCBSRI also understand the pros and cons of self-funding and can certainly support those conversations. If you’d like to discuss the topic, please contact your partners at BCBSRI.
Contact George Tager at 401-644-3169, or Jennifer Quintella at 401-263-8109.