How to Evaluate if Self-Funding is a Good Option for Small Groups

Broker evalutaing a small group for self-funding.

If you’re looking to offer a more competitive plan with better rates, it may be time to consider self-funding. Recently, we’ve noticed a trend where more small employers are turning away from fully-insured products like ACA plans. This shift has led more Brokers to consider whether some form of self-funded plans could be a better option for their groups. The answer to that question depends on the makeup of the groups themselves.

Does Self-Funding Makes Sense for Your Groups?

Two of the biggest factors that can dictate whether self-funding makes sense for your small groups: age and health. The younger and healthier a group is, the better suited it will likely be for some sort of self-funded plan.

While Carriers take on all the risk and pay claims on full-insured plans, self-funding allows employers to take on those responsibilities with the help of a Broker. This allows younger, healthier groups to receive much better rates through self-funding than a fully-insured option like an ACA plan. It also gives small groups more buying power, allowing employers to offer more competitive plans for lower than through the ACA.

Self-funding does have a few potential drawbacks. A fully self-funded plan can leave a group more exposed to a catastrophic claim. However, this can be countered with a partially self-funded plan with stop loss insurance that limits an employer’s total risk, even for smaller groups. However, if you have a group that’s significantly older or has a lot of health problems, self-funded may not be the way to go.

How Do I Transition My Groups to Self-Funded Plans?

To reap the benefits of self-funding, your will need to compile your groups’ medical history to receive medically underwritten quotes. Fortunately, FormFire health insurance quoting software  gives you the tools you need to quickly and easily collect group information and submit it to Carriers.

FormFire’s intelligent employee interview system gives you the ability to provide groups with a Medical Health Questionnaire (MHQ) that collects only the necessary data. This system limits the number of overlapping questions to only collect details that Carriers require. FormFire software also runs an error check on these questionnaires to uncover any mistakes or missing information. The system allows you to check in on the employee so that he or she can update their information without having to complete a whole new interview.

Not only do these features streamline the information gathering process, it also makes you look good by saving the employees and their employers time and frustration. Form mapping is another way that FormFire makes it easier for you to switch groups to a self-funded plan. Since some Carriers have their own applications, form mapping takes the data you collect from employees and applies it to each form so that the individual group members don’t have to.

Self-funding can make a lot of sense for the right groups. So does investing in software that makes managing their benefits quicker, easier and more attractive for small groups. Not only can FormFire help you streamline the Broker management process, we’re also HIPAA and HITECH compliant to ensure that your groups’ information is completely secure. Request a demo of our software today to see how it can benefit both you and your groups.

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