August 13, 2014
As we approach the start of the 2015 open enrollment period, more businesses are wondering what they can do to help reduce their group health premiums, while still providing reliable coverage to their employees. For a growing number of companies, level-funded self-insured health plans continue to serve as an attractive alternative to traditional plans. Those who tend to benefit the most from these include:
- Groups ranging from 10 to 150 employees or members
- Younger, healthier groups and organizations
- Small business trade organizations & collectives
Before you automatically renew your existing group plan, it might be in your best interests to review and consider some of the attributes associated with Level-funded Self-insured plans.
Premiums Based on Age & Health of the Group
Under the new guidelines of the Affordable Care Act, group premiums are determined by what are known as community ratings. By this, the carrier evaluates the overall health of large numbers of employees from specific geographic areas (counties, major metro areas, zip code radius, etc.). With level-funded/self-insured plans, however, premiums are calculated based on the overall age and health status of each specific group. Having the ability to avoid geographic community ratings, alone, has made self-insured plans highly desirable to many businesses.
Reduced Maximum Out-of-Pocket Expenses
A common complaint against the Affordable Care Act and how it relates to groups, has been centered around the need for businesses to raise their maximum out-of-pocket expenses to $6,000; an amount that was all but unheard of prior to the advent of Obamacare. With self-insured group plans, businesses are able to keep this amount lower through more internal allocation of funds, premiums and expenses. This represents one of many ways in which these types of plans can be tailored to the unique needs of the group.
Premiums are Used to Meet the Groups' Needs
One of the most favorable advantages of a Self-insured Level-funded plan, is that premiums are used in a manner that is most beneficial to their own healthcare needs. For example, and as represented in the side chart, premiums from self-insured groups are spread out to meet the needs of the group, including member claims, their re-insurance pool, as well as a stop-loss expense. This is simply not possible under most traditional plans, with the exception of individualized groups and Health Reimbursement Accounts, to a limited extent.
Group Health Options for IL Businesses
If you're an Illinois business looking for a more affordable alternative to conventional group health insurance plans, Premier Financial Insurance offers free consultations to help ensure that you make the best choice. We're located in the Lisle Naperville area and staff a team of highly-experienced licensed agents who are up to date on the latest healthcare reform laws, and knowledgeable on all aspects of employee health benefits and HR support.
Contact Premier today through our website or call us at 800-369-0287 to schedule your free benchmark assessment, and learn how you can save money by choosing the plan that's best for your organization.