Self-Insurance, Health Insurance Now Available to Companies of All Sizes

In listening to our members, one of the common concerns we hear across the board is the rising cost of health care due to the Affordable Care Act (ACA) regulations. Because of this, the Ohio Chamber sought out ways to bring down these costs. In researching, the most effective way we have found is through self-insurance.

Once predominantly used by larger firms, companies of all sizes are moving to self-insurance for their employee health care. In fact, self-insurance usage has increased an average of 14 percent across all company sizes over the last 15 years.

“We are always looking for new ways in which to help our members,” said Vice President of Membership Beau Euton. “In doing much research, we found that providing our members with the option of a self-funded health insurance product could benefit our members who haven’t had that option before.”

Self-insurance is a means of covering your employees’ health care while avoiding costly ACA fees. In addition, self-insured companies receive unused premiums at the end of the year all while fully protecting employees and your company with what is known as stop-loss coverage.

While self-funding is not a new concept, it might be new to companies with fewer than 100 employees as in the past, self-funding was mostly used in larger companies. Companies that are self-insured for health care coverage assume the financial risk for providing the health care benefits. The employers pay for each out-of-pocket claim that is filed instead of paying a fixed premium amount to an insurance carrier. An employer would establish a special account to pay the incurred claims. The special account could be made up of money from the employer, employee or a combination. Employers can still do payroll deductions if they choose to have employees contribute to their health care coverage.

Besides the benefit of avoiding ACA fees, a self-insured employee health plan can also provide these benefits:

•Customization of a health insurance plan that meets the needs of the employees.
•Control over the health plan reserves (employer oversees reserves not insurance company).
•Payments are rendered only when services are used allowing for better cash flow.
•State mandates can be avoided.
•Providers can be selected and contracted with who best suit the needs of the group.

Since the employer does take the responsibility of the claims, self-insurance may not be suitable for all companies. However, most employers purchase what is known as stop-gap insurance to reimburse them in case larger claims are filed. Likewise, if claims are lower than projected the participants could benefit.

Working with BE Solutions, a premier provider of health plan solutions with over 25 years of experience in Ohio, the Ohio Chamber has complied a variety of self-insurance options that will tailor fit to insurance plans to the needs of the company and potentially save employers money.

In the coming weeks, the Ohio Chamber will be rolling out a new website describing the advantages of self-insurance and to help answer questions. We are confident that this program can help businesses decrease health-care costs while being able to provide employees with adequate coverage. Companies who currently work with insurance brokers are also welcome to participate. For more information on this new health insurance program, please register for our FREE webinar that will take place Wednesday, August 31 at 2pm.