The life of a workplace benefits broker isn’t always an easy one. Especially now, as American workers are rethinking their priorities, coming up with the right benefits package is more challenging than ever. If you are a broker, here is a question worth considering: does your general agency offer a health insurance alternative?
Employers have traditionally offered group health insurance through a major carrier like United Healthcare or Aetna. But in recent years, growing numbers of employers have discarded the old model and turned to self-funded health plans instead. A self-funded plan is technically not insurance. But if it is administered the right way, subscribers don’t know the difference.
Alternatives Are a Good Thing
As a broker, you are constantly on the hunt for new products you believe would be valuable to your clients and their employees. With that being the case, you would probably agree that alternatives are a good thing. The more alternatives you can offer your clients, the easier it is to customize a benefits package that meets as many needs as possible. Enter the health insurance alternative known as self-funded health plans.
A self-funded health plan is a good alternative to traditional health insurance for many reasons. From the employer’s perspective, going the self-funded route generally means saving money. It also means being able to design customized plans unique to the needs of the employer’s workforce.
From the employee’s perspective, self-funded health plan represents a more affordable way to access healthcare services. Employees are not forced to pay for coverage they don’t need, coverage that would otherwise be forced on them by traditional health insurance.
How Self-Funding Works
Self-funded health plans can be designed according to one of several different models. The most common model has the employer working with a third-party health benefits administrator like StarMed Benefits (alternative health plans). The administrator acts as an intermediary to work out arrangement with payers, providers, healthcare networks, etc.
The plan is financially supported primarily through employer contributions. An employer may or may not require contributions from employees. When employee contributions are required, they are affected the same way as contributions to traditional health insurance: through payroll deductions.
Self-funded plans offer certain types of services, procedures, and treatments as standard. Anything over and above a plan’s standard offerings would be covered either out-of-pocket or through an additional contribution to the plan itself.
From the Employee’s Perspective
A self-funded plan is very similar to traditional insurance from the employee’s perspective. The plan offers an employee so many primary care visits per year. It might offer free immunizations, well child visits, blood pressure checks, and so forth. It might even offer reduced-cost emergency room visits.
Typically, the employee is responsible for some sort of copay at the time services are rendered. Copays for self-funded plans are comparable to traditional insurance. But of course, they can be higher or lower.
Take a Look at Self-Funding
As a benefits broker, you probably know that working through a general agency gives you access to far more carriers and products than you would ever see working alone. Here’s hoping your general agency gives you access to self-funded health plan options. If so, take a look at them. Self-funded plans could be the key to your ability to expand your book of business over the coming years.
Self-funding continues to become more popular as traditional health insurance costs spiral lot of control. So if your general agency doesn’t offer access to at least a few self-funded options, perhaps it’s time to find a new general agency. After all, you need to keep up with the market.
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