Self-Funded Healthcare Plans have been around for a long time. Self-Funded plans generally include aggregate stop loss insurance as well as specific coverage. Self-Funded plans rose to prominence with the passage of the Employee Retirement and Income Security Act (ERISA) in 1974, which codified a number of regulations designed to protect the pension plans of private-sector employees. The law included Employee Welfare Plans, or Healthcare plans as well.
According to BenefitsPro.com Only about 26 percent of employers with between 100 and 499 employees self-insure, compared with more than 82 percent of employers with 500 or more employees, according to data from the U.S. Department of Health and Human Services. www.benefitspro.com/2015/03/09/the-rise-of-self–funding
Aggregate stop loss insurance is best described as an “umbrella” of sorts, providing a cap on claims costs that are the responsibility of the plan. It provides protection and budget tool for smaller employers that actually makes Self-Funding an affordable alternative for smaller employers.
Historically, Self-funded Healthcare Plans were primarily seen among the largest of employers, but innovations in administration, excess loss insurance (Stop Loss) and risk management has moved the mark down-market to employers with as few as 10 employees.
Self-Funded plans can use medical underwriting as a tool for risk management purposes, that is, a smaller employer can know the risk he would face if he were to enter into a Self-Funded program. Aggregate stop loss insurance would allow that smaller employer to know what his maximum claims exposure would be based on the actual risk.
Aggregate stop loss insurance can be written with claim advance features and “monthly accommodation,” a feature that protects the employer’s cash flow on a monthly basis. USA Business Choice can arrange for the proper stop loss for Self-Funded plans of all sizes.
USA Business Choice “Patriot” was designed exclusively for Smaller Employers and their entry into the Self-Funded world. We have built products for the Small Group market to work with the educated broker.
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