Employers are in search now more than ever for small business insurance solutions. This is nothing new, of course. The “Tug of War” between annual revenue and health care costs has been increasing since the early 1980’s. Employers have watched the cost of their health plans exceed thirty percent of covered payroll. And now The Patient Protection and Affordable Care Act (Affordable Care Act or ACA) has enacted comprehensive health insurance reforms designed to ensure Americans have access to quality, affordable health insurance. This translates to additional costs to employer health plans.
Sometimes the answers to the most difficult questions are right in front of us. Larger employers have gravitated to Self–Funded Health Plans for decades. It used to be that self-funded plans were designed only for the larger employer. Now with the efficiency of claims payment systems, properly underwritten specific and aggregate stop loss coverages, as well as the ability to identify employers who are prime candidates for self –funding, small and medium sized employers can have self-funded health plans as well. Specifically, the employers who maintain the following are prime candidates for self-funding :
- Strong Balance Sheets
- Stable Work Forces, and
- Proactive Management
It is estimated that over 100 million employees are covered under self–funded health plans today. Many employers are savvy enough to include Health Reimbursement Arrangements (HRA’s) to offset the out of pocket costs of a high deductible plan. This strategy saves further health plan dollars while softening the burden of out of pocket costs for employees.
USA Business Choice offers self-funded insurance plans that strictly follow ERISA compliance.
If you have any other questions on this or any other topic relating to funding health insurance, let us know!
USA Business Choice: Built for Small Business, Forged by Choice!