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. 25