Shopping Tips: Choosing the Right Carrier
When shopping for self-funding, consider the following:
- Price: Fully insured and self-funding quotes are not alike. The fully insured quote is one price; a self-funded quote is a range that includes a minimum, expected and maximum. While most employers will pay more than the minimum, the maximum is a worst-case scenario. When quotes are based only on our manual rating system, for example, employer's actual costs run within 2 to 5 percent of expected costs, on average.
- Health plan resources for members: Self-funding options should offer employees accurate, easy-to-use information that helps them make informed decisions and manage their health.
- Reimbursement: The best option will provide for immediate reimbursement—the means by which the stop-loss insurer pays the employer for claims that exceed the specific and aggregate stop loss limits. Immediate reimbursement is something of a misnomer because, under this arrangement, the insurer —not the employer—pays claims that exceed the stop-loss limits. This approach works to eliminate potential cash flow risk and makes it easier for the employer to reliably budget its self-funded plan.
- Small-business focus: Few self-funded health plans have a small-business orientation because this arrangement simply isn’t a focus for most carriers. Small companies should choose a self-funding carrier that has served small businesses for decades, provides self-funding to firms with as few as 25 employees and, in short, will value the employer’s business.
- Medical management programs for high-claims members: Choose a self-funded plan that includes wellness, disease management and acute care programs. The programs will help plan members who have chronic conditions such as asthma and diabetes—the members that account for most claims costs. Great-West Healthcare, now part of CIGNA, offers a Medical OutreachSM which uses savings methodologies validated by the certification process of the Disease Management Purchasing Consortium International.