This blog post is based on the presentation “Voices of Self-Funded Employers: Insights, Tips, and Lessons Learned” from the 2023 Medical Captive Forum. Our heartfelt thanks to our esteemed panelists:
– Francine Campos, Vice President and Chief HR Officer at National Roofing Company
– Peter Fresca, Advisor, Managing Partner at the LBL Group/Acrisure Agency
– Lisa Durkin, Vice President of Human Resources at the Cleveland Orchestra
– Jen Bolyos, Advisor, CEO at HPA Benefits Consulting
Highlights
- Self-funded health plans offer cost-effective options, resulting in more affordable healthcare for smaller businesses than fully insured plans. Self-funded plans can be custom-tailored to meet employees’ unique needs, improving employee satisfaction and retention.
- Self-funding provides complete claims data transparency, enabling cost-saving opportunities that can drive down the price of the plan without impacting quality.
- Employees in self-funded plans tend to feel more respected and cared for, leading to higher engagement and retention.
- Research, the right benefits advisor, and preparedness are essential for a successful switch to self-funding.
Numbers don’t lie. A fully insured plan can cost employees at smaller companies a staggering $2,000 more per year on average for family coverage than at larger firms. This, coupled with a 43% increase in premiums since 2012, is driving small to midsize businesses (SMBs) to look for a more cost-effective way to provide health insurance to employees.
Self-funding in a Group Medical Captive has emerged as an attractive health insurance solution for employers seeking more control over their healthcare plans. Self-insured plans are more affordable than traditional insurance and offer flexibility and control of plan design.
Despite its advantages, implementing self-funded health insurance can feel intimidating. If your company is thinking of switching to a self-funded plan, drawing from the insights of those who have already made the change can be helpful.
By understanding the journeys and lessons learned from those who have taken the self-funded path, you, too, can realize the potential of this affordable health insurance alternative that is helping create a better life for all.
Benefits of Self-Funding
“About three years ago, we were hit with a 20% renewal, and with little or no data to back that up. That really was our ‘aha’ moment. We kept giving money to the insurance company, which was taken away from our employees, and we wanted to break that cycle.” – Francine Campos, Vice President and Chief HR Officer at National Roofing Company
Self-funded health insurance offers multiple benefits over a traditional, fully insured plan. Organizations like National Roofing, which has about 120 employees, and the Cleveland Orchestra, which has about 400 full-time and seasonal employees, have implemented their own self-funded plans.
Since making the switch to a self-funded group medical captive insurance plan with Roundstone, they have experienced these benefits:
Cost Savings
“It is like coming from darkness and into the light. Now, you know exactly what is going on in your whole spend, and you can look at a hundred, 200 different ways to nudge that spend a different way.” – Lisa Durkin, Vice President of Human Resources at The Cleveland Orchestra
Self-funded plans offer multiple cost containment opportunities compared to fully insured plans. With self-funding, you can choose your own Third-Party Administrator (TPA), Pharmacy Benefits Manager (PBM), vendors, provider network, and services based on employee needs to lower costs.
For example, the Cleveland Orchestra has several employees who require infusions at Cleveland Clinic four times a year — a major expense for their plan. With self-funding, they explored cost-effective alternatives, such as in-home transfusions, that yielded savings of around $30,000 annually for each employee.
Flexibility
“Mental health is a big thing. A lot of our guys do not want to see a therapist — it costs too much, it’s too hard, the whole thing. So, we offer no copay and really encourage that. [We have] the flexibility to really fit our team.” – Francine Campos
Self-funded plans offer more flexibility, allowing you to customize plans to meet your employees’ needs. This can include benefits for specific medications such as Humera, chronic care management teams, behavioral health services, or telehealth access.
The best part is that you can make changes year-round with self-funding, not just at renewal time. This lets you start saving immediately while providing better coverage for employees.
Transparency
“I had no ability to look at data and analytics of what the claims spend was looking like. [I asked the insurance company] to explain to me why they wanted a 30% increase. Show me the data that supports that. The answer was, ‘That’s not your data; that’s our data.’” – Lisa Durkin
Self-funded plans provide complete data transparency regarding claims, unlike a fully insured plan that may leave you in the dark. Using data insight tools like Roundstone’s CSI Dashboard, self-funding lets you track healthcare costs based on your company’s spending and industry benchmarks.
This means you and your advisor can identify opportunities for cost savings or better plan utilization. With a self-funded plan, you are in control — and you have the data and the support from the Roundstone team to guide you along your way.
Improved Employee Satisfaction and Retention
“The biggest positive . . . is retaining and attracting the best talent with the best benefits that we could offer to our team that are very personalized. We have the flexibility to build that out. Right now, there’s a war for talent out there. It’s really, really hard to keep top talent and retain them. So, that’s the biggest payoff for us.” – Lisa Durkin
According to an industry survey on workplace well-being, employees who feel respected and cared for by their employees are:
- 38% more engaged
- 17% more likely to stay for at least one year
- 28% more likely to recommend their workplace to others
Self-funded insurance brings major cost savings to the table, letting you offer better benefits without breaking the bank. You can customize your plan’s coverage to fit your employees’ unique needs, making them feel like the company truly cares about them. This personal touch goes a long way in building loyalty and keeping top talent onboard.
Insights from Self-Funded Employers
If you’re considering jumping into the world of self-funding, you can use invaluable insights from those who’ve been there. These insights from seasoned self-funding champions can help you have a more cost-effective, employee-centric, and sustainable healthcare journey.
Patience Pays Off
Self-funding isn’t an overnight fix. It takes time to set things up and start seeing the benefits. Self-insurance with a group captive is designed to be a long-term solution. It’s like building a house; you set the foundation and then each year you make incremental changes and improvements to get optimal results and savings. Give it time, and you’ll reap the rewards.
Claims Management is Key
To keep things running smoothly, nail that claims management process! Ensure everyone knows the ins and outs of the plan’s coverage and how to file claims. Clarity is the name of the game, which means using your HR team to get the word out about benefits and how to use them.
Track Those Costs
“Cost containment doesn’t have to be something that you think about at renewal — it’s throughout the year. You see something coming up in the claims, and you can make certain adjustments at that time,” – Jennifer Bolyos
Keeping an eye on your costs is like having a treasure map to savings. By tracking your expenses through dashboard tools, you’ll spot those money pits and make smart decisions on where to cut back.
Choose Wisely
Picking a reliable TPA is like finding your ride-or-die sidekick. Go for a customer-focused TPA with a proven track record. They’ll have your back and make the whole self-funding adventure smoother than ever by helping with benefits explanations, marketing, and claims processing.
Lessons Learned After Making the Switch
“Our employees saw nothing from their perspective, just new medical ID cards. . . . Once you get the hang of it, it’s pretty easy.” – Francine Campos
Embarking on the journey of self-funding, like any new experience, requires some adaptation. However, with the right approach, you can overcome any initial hurdles and quickly realize the advantages self-funding offers.
If done well, your employees shouldn’t notice any difference between a self-funded plan and a traditional plan in terms of member experience. Those who have made the switch impart the following lessons to newcomers to the self-funding scene.
Customization Is Key
Self-funding is like a custom-made suit hand-crafted by an expert tailor — it needs to fit just right. What works for one company might not be the best fit for another. So, don’t be shy about tailoring your self-funding plan to match your company’s specific needs with a perfect fit. Embrace that flexibility!
Seek Expert Guidance
Self-funding is a complex process, and seeking professional help is okay. Getting that expert hand to help you design and implement your self-funding plan will save you from unnecessary headaches and ensure a smooth transition.
With a group captive plan from Roundstone, you’re not alone. Along with your benefits advisor, you have access to educational resources and a team of customer relationship managers working to help you with data-informed cost containment and wellness solutions.
We do all the heavy lifting so you can focus instead on the core aspects of your business.
Prepare for Risk and Reward
Self-funding gives you greater control over your health plan,so it is important to be prepared for that responsibility. It requires buy-in and commitment from leadership, and is a different way to think about budgeting for your health insurance.
The reward is greater savings and higher-quality care for your employees at a lower cost. It’s a journey worth taking, but being informed and proactive is crucial to success.
Tips for Implementing Self-Funded Insurance
Thinking about diving into the world of self-funded insurance in a group medical captive? From doing research and embracing new responsibilities to starting small, these tips will help you confidently navigate your self-funding journey and create a tailored, affordable healthcare plan.
Education is Everything
It’s important to do your research and understand the pros and cons of self-funding before deciding. Talk to other employers who have self-funded their plans to get their advice and feedback on what works and what doesn’t.
Our panelists also emphasize the importance of educating everyone in your company — including the CEO and CFO — and introducing the new plan to the employees you’ll be covering. Everyone needs to know what they can expect from the new self-funding plan and how to access benefits.
Start Small
If you are still determining if self-funding is right for you, you can start small by self-funding a portion of your healthcare costs. This allows you to see how self-funding works and decide if it is right for your company. Remember, smaller increments add up to big wins, so make little changes as you go.
Design Your Self-Funded Plan With Roundstone
“Going into a captive is a much better comfort level than going self-insured on your own. That’s for sure . . . [and] Roundstone has been a great captive for us.” – Lisa Durkin
If you’re tired of the same old cookie-cutter insurance plans, Roundstone can transform your insurance experience. With Roundstone, you’re in control. We’ve been helping businesses get affordable health insurance for over 20 years through group captive plans that let you design your plan your way for customized coverage.
Walk away from unnecessary expenses and rigid plans that never seem to cover what you actually need. Our flexible solution lets you design a plan that suits your budget and provides the coverage you deserve.
Take charge and make insurance work for you. Talk to a Roundstone Advisor today to learn how self-funded insurance can save you thousands in healthcare costs and help you build a brighter future for all.
