Table of Contents
Self-funded plans have several benefits, from letting plan recipients choose an eye care provider in Tulsa or elsewhere to lowering the total cost of offering a benefits package. As a broker, you can stand out by educating employers about this alternative and recommending the best option for their needs.
Why choose a self-funded plan?
With a self-funded plan, the employer will set up an account and pay claims out of this account. Then, depending on the benefits package offered, the employer can either fund this account themselves or deduct premiums from employees to fund this account. Some employers also use a combination of these methods, which gives them more control over what they spend on benefits.
Typically, this costs less than paying a premium to an insurer for a fully insured plan. This is because, with a fully insured product, the employer pays the same premium regardless of the rate of use of the plan. However, if an employer opts for a self-funded plan instead, costs depend on how often employees file claims and for how much.
Because the employer carries the risk instead of the insurer, they have more control over the benefits offered. Plus, self-funded plans result in a regulatory environment that is easier to navigate since employers have to follow ERISA rules but don’t need to comply with state regulations.
Compared to fully insured products, self-funded plans allow more flexibility. They offer businesses the opportunity to customize their health care plan to meet their unique business needs. This results in higher satisfaction rates for plan recipients and better patient outcomes.
There are some similarities with fully insured products. Like with a traditional vision plan, plan recipients get pre-negotiated prices from participating vision care providers. Negotiating prices with eye care Tulsa doctors and ODs located in other areas allows employers to manage costs. Plus, employees know exactly what their out-of-pocket expenses will be if applicable.
Considerations for self-funded plans
Is a self-funded plan an option that makes sense for everyone? This benefit is prevalent among larger organizations since 82% of large firms offer self-funded plans. In addition, because the employer bears the risk of the plan, a large pool of employees can help mitigate this risk.
Besides assessing risks carefully, employers should look at administrative costs. The insurer typically rolls these costs into the plan premiums with a fully insured product.
Employers who opt for a self-funded product can outsource tasks like claims processing and enrollment to a TPA or third-party administrator. However, handling these tasks in-house often lowers costs.
Getting started with self-funded plans
A self-funded product makes sense for employers looking to cut costs and offer more value. Vision plans are a great place for these employers since this type of coverage is easy to customize and has very little if any risk.
As a broker, you can stand out by recommending self-funded options. With benefits costing $10.88 per hour per employee on average for the private sector, presenting employers with a way of cutting costs can be a powerful argument in favor of self-funded products.
Not sure where to get started with recommending self-funded plans? Vision Care Direct of Oklahoma is a pre-paid plan provider with an extensive network of specialists who deliver eye care in Tulsa and nationwide with excellent value for employers and plan recipients. Find out more about our self-funded plans and other flexible options.
