Pro's & Con's of Self funded plans?

[Guest jhdaniels]

The Company I am working for uses a TPA for their self funded health plan. The TPA has only offered a 12/12 paid contract during the 12 years, and this year we requested a 12/15 or some form of run-out protection, but they refused to offer it. We have looked around for alternatives and found an insurance co., not another TPA arrangement, that is offering a 12/27 contract. The fixed costs are very different, with the TPA's being the lowest of the two, however, the ins. co. also is providing an aggregate stop loss limit which makes their plan cap slightly less than the projected final cost of the TPA's plan.

The question is: how do we get out of this never ending circle the TPA has us in?

-JD

Racine, WI

[Guest ScottN]

Your TPA may not be doing a good job for you in negotiating with reinsurance companies. If you use a consultant/broker, ask them if they have contacted reinsurance companies on a direct basis (without going through the TPA).

I would also consider a new TPA since the current one does not seem to be meeting your needs.

Be careful of the insurance company arrangement. I have seen a few including GWL and TNE that have much higher fixed costs which noone has explained to my satisfaction.

[Kirk Maldonado]

I agree with ScottN. In my experience, TPAs tend to be more cost-efficient than insurance companies.

[Guest Halbogie]

I would not move to a carrier for the sake of a reinsurance arrangement. That decision should be made after a careful evaluation. There are other TPA's a and Reinsurance companies who will provide you with what you are seeking. However, this move should be strategic and not reactive.

We would be happy to discuss this with you.