Is Self Funded Insurance Good for Employees?

Is self funded insurance good for employees? If set up the right way, self funded group health insurance is great for employees, but that doesn’t mean they will know it’s great for them. Because unless you (the employer) directly tell your employees, they won’t even know you are self funded.

Moving from fully insured to self funded is really just an administrative change that happens in the background. So why is self funding good for employees? It’s because when you are self funded, you have the ultimate control of your health plan. This control provides you the ability to customize your plans and align with health plan partners that have your best interest in mind. When you align your health plan with partners like this, your costs will go down (or go up less). This will directly impact employees because a sustainable health plan means that employees don’t have to shoulder the burden every year of higher deductibles, higher payroll deductions, and a constant switch in insurance carriers.

That’s just the start as well because after you get control and align with the right partners, you can take it a step further by implementing a benefits rewards program. This means rewarding members (i.e., make it FREE) for making good healthcare decisions. For example, make it free when they choose a high-quality provider, because everyone wins in that scenario. Make it free when they choose the $300 MRI instead of the $3,000 MRI, because $2,700 in savings far outweighs what their copay or deductible would have otherwise been.

Is self funded insurance good for employees? Yes, self funding your group health insurance plan can be great for employees. But if you self fund your health plan and don’t get control by aligning with the right partners, your employees will not benefit from lower costs over time. And they certainly won’t get opportunities for FREE healthcare.

My advice is if you want self funding to be good for your employees, don’t just put a new color of paint on it, consider remodeling your health plan with the right partners.

About the author:
Mike Kroupa has consulted on over 250 self-funded health plans over his 15-year career in the group health insurance industry. Mike started his career as an actuary at Mercer where he spent 5 years specializing in large, multi-site employers. Prior to joining Connor & Gallagher OneSource (CGO), Mike spent 10 years at HUB International where he led their data analytics team of 20 people and over 180 self-funded clients. Mike's passion is to help employers remodel their health plans to build health plans employees love at an affordable price.

Mike Kroupa
Self-Funded Group Health Plan Consultant
Connor & Gallagher OneSource (CGO)

We can help you build a group health plan that employees will love and won't break the bank.

How do we do that?

Here's a real life example of a 70 employee company in Illinois that we remodeled their group health plan for:

• Out of pocket costs for employees reduced by $1,000
• The client was able to offer employees several benefits for $0 including high-cost medications (rewarded for making the right decisions).