Health insurance is one of the most sought-after benefits, but not all plans work the same way. There are several different types of group health insurance that differ in terms of how the insurance is purchased and how it affects the group’s premiums and plan options.
While all these plans have certain advantages and disadvantages, it’s up to you to decide which makes the most sense for your needs. Here are some of the common types of group health insurance options available for small businesses.
When it comes to finding the right health plan for your business, the key is to find an option that makes sense for your business. One route that a business can go is to invest in TPA services for a self-funded health plan, which offers several benefits that can help owners save money and mitigate their risk with proper planning and support. Self-funded insurance also allows businesses to avoid some of the increased regulations on healthcare, which is a big reason why more small and midsize employers are choosing to self-insure, according to the Society for Human Resource Management.
With all that in mind, self-funding sounds like an intriguing option, right? However, there are a pair of misconceptions about self-funding that either dwell in the past or are not that relevant to business owners. Here are two reasons why owners avoid self-funding, and how a TPA can dispel those arguments.
Escalating costs of healthcare and benefits have led business owners across the country to seek out a solution that makes the most sense for their company. Of the many options out there, self-funded health insurance has become a realistic opportunity for many small businesses thanks to third-party administrators.
These organizations, also known as TPAs, allow business owners to take advantage of self-funding, which can provide a “greater level of flexibility that comes with being able to tailor the plan to their needs,” according to the Society for Human Resource Management. The self-funding process can be complicated, but a good TPA can simplify the process so that employers can reap the benefits of self-funded insurance without having to deal with the risks of managing it themselves.
Considering all of the recent healthcare regulations, now is a better time than ever to consider a self-funded health plan. Self-funding your health insurance is a long-term strategy to save money, gain total control over your plan, and may offer immediate savings.
It is a common misconception that self-funded health plans are only advantageous for large employers. In a traditional self-funded arrangement, small employers weren’t able to absorb the risk on becoming self-insured due to potential losses. By self-insuring your plan coupled with a stop loss policy (also known as a catastrophic policy), you mitigate your financial risk while allowing your plan to reap all of the benefits. Stop loss policies allow employers to evaluate potential savings and maximum exposure by becoming self-funded. Prior to stop loss insurance, the potential savings were estimated and max exposure was an unknown.
Group Management Services offers stop loss insurance that allows small employers to be rated on their own medical applications while experiencing savings due to our economies of scale. This means we’re able to offer lower stop loss premiums due to our volume, but your premiums aren’t affected by other plans should they not do as well as yours.
With the waters of healthcare becoming murkier every day, employers and employees abdicate many of the cost-auditing responsibilities regarding their healthcare to their insurance company. Unfortunately, placing this level of trust in your company’s health insurance carrier leaves the proverbial fox to mind the hen house.
Those who purchase health coverage through a commercial provider mistakenly believe their insurance company is actively advocating for them and monitoring the costs incurred for healthcare services. While this is far from the case, the shocking part of this reality is that the insurance companies are forcing you to pay more than you should for your company's coverage.