Self-Insured Group Health Plan in Asset Deal

[Guest friedbrain]

Our client is considering whether they should assume the seller's self-insured group health plan. What potential problems/issues should our client be aware of for these types of plans?

[Kirk Maldonado]

One big problem with self-funded plans is the difficulty in getting stop-loss insurance to cover claims that come in after the plan year ends when you terminate the plan. I strongly urge you to get an insurance broker or agent, whichever is applicable (obviously, I don't work in the insurance industry) that regularly works with self-funded plans. There are a number of nuances that only apply to self-funded plans. Most agents that don't deal with them on a regular basis will refer in a specialist when issues regarding self-funded plans arise.

[Guest mmolz]

Friedbrain,

As a broker I am very familiar w/ your problem. I would suggest that your client meet with the current broker & the current tpa to discuss the ups & downs. Under the partially self-funded plan the employer is responsible for claims that were incurred during the contract period but not paid during the period. If you terminate this plan mid-plan year you could lose your stop/loss coverage and then be totally naked for incurred but unpaid claims

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Mike