Risk & Business Magazine General Insurance Services Magazine Spring 2018 | Page 25

HEALTH INSURANCE
BY: ERIC GIBSON,
GROUP BENEFITS EXECUTIVE,
GENERAL INSURANCE SERVICES
Small Companies Can Self-Fund Too
T
hink your company is too
small to self-fund your
health insurance plan?
Well think again. I actually
have a client that self-funds
with only six employees. Granted, the
process is somewhat different than it
would be for the big guns, like General
Electric or American Airlines. But for
most companies, it’s a path to better
controlling your health care costs and
keeping your employees healthier.
A true self-insurance plan does typically
require the resources of a very large
company for whom a sudden, large
healthcare expense—say for cancer
treatment—is a drop in the proverbial
bucket. A company must pay for all of
these expenses out of its own pocket
when fully self-insuring, so if a small
company were hit with this type of hefty
bill, the cost would be prohibitive. That’s
why small companies set up self-funded
plans together with stop-gap insurance,
which fills in the difference between
what the company must pay and the
actual expenses. There is also a separate
component of aggregate stop-loss
coverage that kicks in when the company
reaches a total given payout amount for
all employees. Back-office responsibilities,
including enrollments, terminations, and
claims processing, would still be covered
by a third party. However, the company
would be able to retain more control over
expenses without having to fork over a set
amount to an insurance company in the
form of monthly premiums.
The good news for employees is that
a self-funded plan—albeit with gap
insurance—can help the company
structure a customized program that
provides effective wellness, preventative
health, and educational programs to
keep employees fit and productive. I
call it “turning the dials,” which means
developing a plan that has the emphasis
where your company needs it most. For
example, if you have a company with
a high number of diabetic employees,
you can “turn up the dial” for diabetes
education and prevention programs in
order to help folks avoid medical claims
by becoming healthier, which also makes
them more productive at work.
These self-insurance programs offer
additional financial incentives for
businesses, including a reduction in
state taxes and greater cash flow and
opportunities for investment in your own
company. There are also tremendous
benefits from being able to obtain
comprehensive cost and performance
data, which allows you to pinpoint areas
of high expense and try to develop and
implement cost control programs.
The great thing about working with
General Insurance Services on developing
a self-funded plan is that we take a
proactive approach with every client,
working together to ensure that the
plan we design is right for you. That
means everything from holding monthly
or quarterly strategy meetings to
establishing effective milestones and
timelines to helping you develop healthy-
living programs for your employees.
Through these programs, you have
the opportunity to develop a healthy-
minded workforce that benefits you, your
employees, and even your employees’
families.
Please visit our website at www.genins.
com or contact me personally to learn
more about these programs and how they
might benefit your own company. +
Eric Gibson has been with GIS for nearly five
years where he specializes in group benefits for
organizations of all sizes. Outside of the office,
Eric enjoys spending time with his wife and
daughter.
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