Self Funded Insurance - Great Western

[Guest andyj]

We have 79 employees with about 50 on our medical plan. We are located in the state of Florida. We are considering a self fund plan with stop loss insurance. What are the positives and negtives of this plan?

Are we large enough for this to make sense?

We have a few people that have major medical problems.

[Ron Snyder]

This message is in the wrong thread and therefore hasn't had responses.

You are not really large enough for a self-funded health plan: generally a true actuarial group of 500 or more would be required to be able to absorb the swings of risks and claims. However, your group is (barely!) large enough to consider a partial self-funded approach. The way it would typically work would be to purchase a high-deductible health plan.

I have just obtained a rate quote on a similar sized group who found that they could reduce their health premiums from $26,000 per month to $16,000 per month by raising their deductible from $100 to $1000 per year. They also priced $750, $1,500, $2,000 and $2,500, but the optimal level of coverage was the $1,000.

For coverage below that amount they can either (1) self-insure, paying claims from the funds saved by increasing the deductible based on the EOBs from the insurance company, or they can (2)create health reimbursement accounts for their employees with the savings. Either type of plan should be able to be administered by a flex plan administrator. (1) is simply an employer-funded 125 account, while (2) is an HRA as provided for under Notice 2002-45. The difference between the 2 arrangements is who gets to keep the funds not spent at the end of the year.