The reasons self-funding your health insurance plan will lower your costs

The biggest pro, and I would say the main reason employers actually are considering self-funding is over time it is gonna lower your costs. Now it doesn't mean it's gonna do it in year one. To be clear, self-funding is a three to five year decision. And there's a lot of things to consider here. But at the end of the day, there are a few reasons why self-funding your health plan, if you are a good candidate, will eventually lower your costs. For one, there's no more state mandated benefits. And a lot of times these state mandated benefits are things that are just put in place by individual states. You cannot control as an employer in a self-funded health plan, you have the full flexibility to say, I want to include that or not include that. This could be something as simple as a prenatal screening that a certain state requires. Typically, these state mandated benefits are things that are gonna cost the employer more money, so getting rid of those mandated state benefits is going to save employers money in the long run. There are other things that are built into fully insured health plans as well, that as soon as you go self-funded are eliminated. Things like premium tax that are built into a fully insured premium that an employer really has no control over. Or when ACA was passed for a long time until it was repealed, there was something called a health insurer fee built into every fully insured premium. And so as you move into a self-funded environment, those things go away and that is immediate savings. In addition to that, there are gonna be years in a self-funded health plan where you have really good years where claims perform much better than expected, and you are gonna get great positive cash flow in those types of years, and you will have some. Now, granted I said it's a three to five year strategy, so that may not happen year one, but in those years where your claims perform well, that positive cash flow is gonna impact your bottom line.