Why Do Employers Self-Fund Their Health Plans?

Aug 5, 2020 | Cost Savings, Self-funding, Third party administration

That’s easy… Self–Funding saves money.

Within a five-year period, self-funding offers a 95% chance of outperforming a fully insured plan. Also, a self-funded employer owns their data. This allows the employer to make informed decisions based on their needs, not the carrier’s.

According to the Health Care Administrators Association (HCAA), there are several other reasons why employers choose to go the self-funded route, including:

  • The employer can customize their plan to meet the specific health care needs of its workforce, as opposed to working with a “one-size-fits-all” insurance company.
  • The employer maintains control over the health plan reserves, not an insurance company.
  • The employer does not have to pre-pay for coverage, thereby providing for improved cash flow.
  • The employer is not subject to state health insurance premium taxes, which are generally 2-3 percent of the premium’s dollar value.

If you’re considering self-funding and want to know how MedBen has been delivering self-funded savings to employers over the last 31 years, ask your broker to contact the MedBen Marketing Department at 888-627-8683.