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Does Your Company Offer Self-Insured Healthcare?

Choosing the best option for providing healthcare to your company can be a daunting process.

Understanding the minutia of the Affordable Care Act while providing the best benefits for employees can make anyone feel like they're drowning.

With the usual concerns of preexisting conditions, premium costs, and in-network doctors, knowing the differences between self-insured and fully-insured healthcare is a confusing task that can easily be overlooked.

Do you offer fully insured benefits ?

Traditionally, fully-insured healthcare has been the standard practice for most companies. And with the creation of ACA, laws are such that medium to large companies are mandated to provide health care. The easiest route to take, in order to stay compliant, is to simply use a private insurance company. These large conglomerates have been built around the act of providing insurance. They employ a huge number of people and specialize in providing the services most companies need. They have optimized broad and umbrella type policies that fit like a poncho over their various customers.

Following the law and providing good enough insurance for employees is the idea behind hiring a private insurance company. The amount of work they save your company and the reduction of headaches makes them a popular option in the marketplace.

The first and most obvious cost of buying a fully insured plan is the cost of premiums. This is the monthly cost that must be paid to the insurance company. It is set on a fixed annual basis for the number of employees on the plan. If new individuals are added, there will be an increase in cost.

The premiums are generally calculated internally by an actuary, employed by the health insurance carrier. This individual, or team of individuals, has the job of analyzing the employees of new companies, deciding how much of an insurable risk each person may be. While the metrics for studying how the premiums are calculated are generally industry secrets, the basics can be inferred.

Fully insured plans look at each individual and measure the risk of the individual's likelihood to make a claim with the policy. The more likely a claim, the more expensive a person is, and the higher a company's premium becomes. One of the largest factors of deciding premiums is based on the age of employees. Older companies are more likely to engage in higher rates of doctor visits and surgeries. When actuaries are reviewing the raw stats of employees, those over a certain age are automatically given a higher price tag.

Depending on the company, there could be a more in-depth analysis of individuals. This could include a biometrics scan and a general health overview. If employees are living unhealthy lifestyles and are at risk of making a claim, premiums will be increased.

Healthcare is regulated by each state, individually. This means plans are taxed at different rates for different areas of the country. Because health insurance falls under the powers of the state, your plan will be affected by local politics. Understanding the differences among states could be a deciding factor, especially if you have a multi-location business.

If you notice, the word "risk" continues to describe the use of medical care. This is because fully insured medical plans are a reactive policy. Companies wait until after an employee is sick or afflicted before paying for healthcare. As you can imagine, this is inefficient and costly. If employees become habitualized to only see a doctor for emergencies, smaller ailments that could potentially prevent more expensive visits will be ignored.

The premiums paid to the company are fixed. Final decisions regarding spending and claims are still done in the company. There is no such thing as refunds or a cash back option. If your company ends up spending less on insurance than what was paid in, the left-over money turns into profit for the insurance company. While this is the way it has always been, is it the most cost effective for your business?

Self-Insured Healthcare

Larger companies, think fortune 500, typically create their own healthcare policies. One of the deciding factors for choosing this option is the cost. Self-insured plans keep all employee payments in an internal account. This means, that if healthcare costs end up being less than expenditures, the leftover funds stay with the company and are not siphoned off into profits like a fully-insured plan.

While the cost savings seem obvious, at least on the surface, self-insured plans are inherently harder to operate. Because 100% of processes are taken in-house, it creates the need for internal paperwork and customer service. One of the ways to combat this increased workload is to hire a Third-Party Administrator (TPA). By contracting a TPA, companies can save costs and rely on a professional organization for paperwork needs. This also creates an external agency for employee questions.

It does not take away decision making processes. Final decisions regarding spending and claims is still done in the company, usually by the company head. Being in-house, self-insured plans do allow for the opportunity of transparency among employees. Educational materials about overall expenditures and how much money is left over could make it easier to initiate healthy lifestyle changes. It also presents the opportunity to refund employees based on the year's expenditures.

PHMP can benefit both Fully-Insured and Self-Insured Healthcare Plans

The Proactive Health Management Plan is a fully-insured, indemnity plan, focused on preventative care. PHMP has been built to compliment both fully-insured and self-insured healthcare plans.

The PHMP is a fully-insured indemnity product licensed and falls under the same tax treatment as other fully-insured indemnity products. Partnering with us is easy and pain free, no need to worry about government induced headaches.

Preventative Care Focused on Healthy Employees and Cost Savings

P remiums for fully-insured health insurance plans can become an expensive burden on your company. Finding ways to increase the health of employees can keep costs down and benefit overall productivity. PHMP has created a system of encouragement and a network of professionals, designed to help everyone become a part of the program.

While voluntary, PHMP differentiates itself from less adequate wellness programs with a strategy of focusing on quantifiable changes in employee health.

Why are we so confident?

Because we use financial incentives and modern technology, joining and participating in the program is easy for everyone. When employees participate in a program, they automatically qualify for their monthly indemnity payment. These payments can be as large as $625 on a monthly basis.

Participation is easy and overall, fun to do. Preventative care involves bio-metric screenings, DNA testing, and tele-medicine access.

Biometric screenings are conducted in-person with employees. A health care professional will visit the workplace and analyze each individual on the plan. This provides data for creating a health profile that can be used by health coaches. PHMP provides the necessary tools to help employees realize their lifestyle goals.

DNA testing is simple and straight forward. Blood is taken and sent to a laboratory where a complete DNA analysis is conducted. Doctors can now search for specific genes that are linked to hereditary diseases, like breast cancer.

Tele-medicine gives participants a 24/7 hotline to call doctors whenever they feel sick. Increasing communication can help avoid costly doctor's visits.

PHMP is creating financially lucrative methods to save employers' money while increasing employees' take home pay. Health really is wealth, and we are here to help your business thrive in the new healthcare landscape.