COVID-19 (Coronavirus) Updates: CobraHelp will continue to deliver service excellence and compliance support to our Clients and their Employees during these challenging times. We are working to provide Employers and Agents with the latest legislative updates on a national level. We encourage Employers, Benefits Administration partners and Insurance Agents to learn more about the most recent COVID-19 DISASTER RELIEF updates (the American Rescue Plan Act) here. 
CobraHelp
  • Home
  • About
    • Testimonials
  • Services
    • COBRA Administration
    • State Continuation Administration
    • Retiree & Direct Billing
  • Resources
    • How COBRA Works
    • How Brokers Benefit with CobraHelp
    • Employer FAQ
    • Broker FAQ/Help
    • Blog
    • HR Tools
  • Contact
800.398.2946​
LOGIN Request a Proposal​
  • Home
  • About
    • Testimonials
  • Services
    • COBRA Administration
    • State Continuation Administration
    • Retiree & Direct Billing
  • Resources
    • How COBRA Works
    • How Brokers Benefit with CobraHelp
    • Employer FAQ
    • Broker FAQ/Help
    • Blog
    • HR Tools
  • Contact

CobraHelp Blog

BENEFITS | HR | COMPLIANCE
READ: 5 Common COBRA Mistakes & How to Avoid Them
​Read our blogs for the latest in COBRA news and updates

Subscribe to The COBRA Advisor newsletter for fresh HR insights, law updates, and more.

Subscribe

Trending - Why Are Small to Mid-size Businesses Going Self-Funded?

4/20/2017

0 Comments

 

Author

Grant Ameel

The uncertainty of it all...

​There has been a lot of uncertainty surrounding the healthcare industry in recent years and even more now with a newly elected President in office. 

A rapid change...

Last month the Trump administration tried to repeal the Affordable Care Act but they did not have enough Republican support to vote the GOP health-care plan into action. Nevertheless, Healthcare reform remains a top priority for the Trump administration as they hope to repeal the ACA before tackling their plans for a tax overhaul. With the current political climate on healthcare and the ballooning costs of insurance premiums many employers have started to look for less conventional means to find affordable and stable healthcare for their employees. One such option has become a popular trend in recent years and that’s self-funded health plans. ​
​Self-funded healthcare plans were once considered only an option for large enterprises with the resources and funds to assume the risks and expenses that come with paying the claims of their workforce. That notion is rapidly changing as recent data suggest that large numbers of small and mid-size companies are joining the self-funded trend within the past 5 years. If managed correctly, a self-funded employer could save 10% to 25% of their healthcare costs by eliminating the profit margins imposed on premiums from carriers of fully funded plans. Those potential savings are nothing new though. Neither are the potential risks of self-funded plans – they are a high risk, high reward healthcare strategy.  As much as a company could save on their healthcare benefits over the long term, they could just as easily encounter unexpected, catastrophic claims that could cripple a smaller business. For example, an employee battling an obscure form of cancer for multiple years could rack up millions of dollars in claims and the employer could be stuck footing the bill. 
Picture


So why the recent trend of small to mid-sized companies switching to self-funded plans?   

​Most experts attribute this trend as a recourse to the ACA. The reason being is that the Affordable Care Act requires fully insured plans to meet strict requirements – such as offering these 10 essential benefits. Self-funded plans however are not held to the same requirements and thus employers have more freedom to mold their plans to fit their employees needs while opting out of other benefits that are deemed less pertinent in hopes to reduce costs. In addition to that, the ACA has levied employer cost-share requirements in the form of taxes and fees, often referred to as the health insurance tax. This tax is mostly compensated by the carriers by increasing the premium rates they charge employers. Self-funded plans, however, are not subject to this ACA health insurance tax, nor are they subject to any state insurance regulations and premium taxes. Therefore, even though the risks are still there, self-funded insurance plans can now save money on the carrier’s profit margins, the ACA health insurance taxes, and by being exempt to meet certain essential benefit criteria. Those three cost saving traits have made self-funding plans more enticing to smaller businesses whom may have otherwise thought the savings weren’t worth the risks. 

​What can we expect for the future of self-funding?

​If President Trump and the GOP are successful in repealing the Affordable Care Act, the simple conclusion would be that the trend of Self-funded plans would cease - if Obamacare caused the surge in self-funded plans, then one would think its repeal would have the equivalent reverse effect. Well, it might not be that simple. ACA or not, employers are searching for any savings they can grasp onto in a country were healthcare and drug costs are rising out of control. 
Self-funding still provides great flexibility and carrier profit margin savings, regardless. So, unless the overall cost of healthcare premiums start to decrease across the board, don’t be surprised if the self-funded trend continues, regardless of how the healthcare reform changes under the Trump administration.  
Picture
In fact, this ​uncertainty in healthcare over the next 4-8 years could just be another driving motivation for even more companies to consider self-funding. All of which remains to be seen. 
LET'S BE BUDDIES!
0 Comments

Your comment will be posted after it is approved.


Leave a Reply.

    Categories

    All
    2016 Cobra Reporting Deadlines
    ACA Benefits
    ACA Compliance
    Affordable Care Act
    Benefit Admin Solutions
    Cobra Administration
    Cobra Administration Companies
    Cobra Benefits
    Cobra Compliance
    Cobra Compliance 2016
    Cobra Compliance Audit
    Cobra Customer Service
    Cobra Eligibility
    Cobra Employer Requirements
    Cobra For Retirees
    Cobra Guidelines For Employers
    Cobra Non Compliance Penalties
    Cobra Retiree Coverage
    Cobra Rights
    Cobra Services
    Compliance Outsourcing
    Federal COBRA Regulations
    Health Savings Account
    Medicare Compliance Regulations
    Medicare Modernization Act
    Open Enrollment 2017

    HR Outsourcing Services Blog RSS Feed

    Archives

    January 2025
    November 2024
    October 2024
    August 2024
    May 2024
    April 2024
    March 2024
    November 2023
    October 2023
    September 2023
    August 2023
    July 2023
    June 2023
    May 2023
    April 2023
    March 2023
    February 2023
    September 2022
    May 2021
    April 2021
    March 2021
    February 2021
    November 2020
    September 2020
    August 2020
    July 2020
    May 2020
    April 2020
    March 2020
    February 2020
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    March 2018
    January 2018
    October 2017
    August 2017
    July 2017
    April 2017
    February 2017
    November 2016
    October 2016
    September 2016
    September 2015
    February 2015
    January 2015
    April 2014
    March 2014
    February 2014

CONTACT

CobraHelp
Send Mail To: 
1551 Emancipation Hwy, Unit #1050
Fredericksburg, VA 22401
Toll Free: (800) 398-2946 
Local: (303) 322-2043
Email: ​[email protected] ​
​© Copyright 1986-2025 CobraHelp.  All Rights Reserved
HTML Sitemap | XML Sitemap 
Terms & Conditions | Privacy

RESOURCES

​US Department of Labor
Electronic Code of Federal Regulations
Quick Checklist
​For Insurance Agents
​
Career Opportunities
​Participant Login
Email: ​[email protected]

​RESOURCES

HR Compliance Tools
FAQ/HELP Brokers
FAQ/HELP Employers
Request Demo
Request Media Kit
​How COBRA Works
SHRM Listing White Papers

​RESOURCES

Connect with us!