Is Self-Funded Health Insurance Right for Your Business?

Highlights  

• Many small to midsize businesses may not know they are an ideal fit to benefit from the flexibility, control, and transparency offered through self-funded health insurance.

• The ideal candidate for self-funded health insurance views their employees as an asset and focuses on attracting and retaining top talent.

• Self-insurance is also ideal for businesses that have an innovative leadership team and a long-term perspective on business priorities.

• Self-funded health insurance with Roundstone’s group medical captive offers employers a way to customize their health insurance plan to meet their budgetary and coverage needs.

For small to midsize businesses considering self-funded health insurance, it’s helpful to explore characteristics that make it a good fit. Understanding these attributes — such as how you view employees and workplace culture, how you approach and resolve business issues, and whether or not you have a growth mindset — can help you decide if self-funded employee health insurance is right for you.

Self-Funded Health Insurance for Small to Midsize Employers

It’s no secret that insurance costs are skyrocketing for employers and employees. The Kaiser Family Foundation’s (KFF) most recent employer benefits health survey found that premiums have risen 47% in the last decade, to over $22,000 per year for family coverage.

In addition to rising costs, the past few years have thrown employers considerable changes regarding employee health benefits needs. Employees are looking for flexible coverage and more mental health services than in previous years, making flexible plan design crucial for meeting shifting healthcare needs.

Self-funded health insurance can help employers gain control of this expense, while also offering flexibility to create a health plan that suits your unique needs.

What Is Self-Funded Health Insurance?

Sometimes called self-insurance, a self-funded plan is one in which a company pays the medical expenses of its covered employees themselves. Instead of paying premiums to a 100% fixed-cost insurance company, companies get to keep their unused funds each year.

Self-funding isn’t a new idea; large corporations have been doing it for years. With the introduction of Roundstone’s medical group captive in 2005, self-insurance is now feasible for most small to midsize businesses.

With Roundstone’s self-funded insurance plan, for example, you can take advantage of an open platform to custom-build your plan from the bottom up to provide better healthcare for your employees’ specific needs and year-over-year savings on insurance premiums at the same time. That means better benefits at a more affordable price. What’s not to love?

Before you make the switch, it’s important to determine if self-funded health insurance is right for your company. Here are some ideal qualities to think about when considering a self-funded health benefits plan.

The Ideal Employer for Self-Funded Health Insurance

While many companies can benefit from joining a self-funded plan, employers ready for the switch typically have the following traits:

You View Your Employees as an Asset

Implementing a successful self-insured group captive plan means working together with your employees to encourage self-advocacy regarding their healthcare. When you view your employees as assets to your company, you are more likely to include them in plan design considerations that benefit their health, your budget, and your company’s productivity.

You are also sensitive to their budgets and are not eager to pass along health insurance cost increases to your employees. With inflation already taking bites out of employee raises, increasing employee healthcare contributions as a method to maintain company costs is a delicate dance — one you shouldn’t have to participate in!

You Must Work Within Your Budget

Ideal candidates for self-funded insurance have budgetary constraints that make traditional insurance impractical. With fully funded insurance, you have little to no say in plan design, costs, and providers, making it difficult to budget effectively for your company.

You also get significant rate increases every year without explanation.

With self-funded insurance, you can easily address your budgetary constraints and build a plan with high-quality providers and services you can afford.

You Focus on Recruiting and Retaining Talent

Employers that benefit most from self-funded insurance have a focus on recruiting and retaining talent. To attract and maintain top performers, you need a flexible employee health benefits plan that meets your staff’s needs and doesn’t shift a disproportionate share of the costs their way.

An excellent health benefits plan shows respect for your employees translates to higher retention, especially in a competitive labor market. A Harvard Business Review study found that when employee needs are met by employers, the likelihood of retention bumps to 200%.

You Have an Innovative Leadership Team

Self-insured group captive insurance requires an innovative leadership team that isn’t afraid to try non-traditional benefits options. Self-funding means saying no to a cookie-cutter plan with little or no flexibility or data transparency. It means taking control and building your own plan.

Just because it’s called self-funding doesn’t mean you go it alone, but it does require your insight and input to make decisions regarding plan elements.

Roundstone’s experts help our clients put together a bundle that’s right for them. Our Cost Saving Investigators (CSI Team) works with company leaders to find and implement the most effective cost containment solutions.

With Roundstone’s self-insurance solution, you’ll never feel alone when making choices about your healthcare. We work with you to discover approaches that work for you, including direct primary care programs, concierge care, and employee well-being programs that fit your budget and needs. Self-funded health insurance under a captive helps employers save on healthcare and gives them complete control of their plan. They are able to provide higher quality care for less and get to keep any unused healthcare spend.

You Take a Long-Term Perspective

Just like any big strategic investment, we believe health insurance requires a long-term approach, not something you chop and change every year. The ideal employer takes a long-term perspective on self-funded healthcare and realizes that continued analysis and changes are needed to design a plan that maximizes savings.

Clients in Roundstone’s self-insured group medical captive save an average of 20%, and we guarantee that you will see savings in the first five years, or we will make up the difference. In fact, two-thirds of Roundstone companies that self-fund their insurance costs save enough in their first four years to pay for their entire fifth year of claims.

You Run on Data-Informed Decisions

The ideal self-funded employer has an appetite for information and insights. Self-insured group captive insurance offers freedom of choice. With that freedom comes the responsibility of familiarizing yourself with your healthcare plan and your claims data so you can optimize plan utilization and implement cost containment and wellness solutions that actually work.

Ideally, you’ll enjoy exploring health insurance topics and innovative solutions so that health and wellness become core values.

With Roundstone’s self-insurance solution, you can access your claims data through our CSI Dashboard, allowing you to make changes to your plan and save money. Our CSI Team works with you and your advisor to gather insights from your data and help you discover cost savings solutions that you can implement in real time to impact your costs.

You Have an Engaged HR Manager/Department

Successful self-insured group captive plans are run by influential and engaged HR managers or departments. That’s because with a self-funded plan, employees’ input and experience matter.

Unlike a fully insured plan handed down to employees without any prior input or leeway for treatment options, a self-funded insurance plan hinges on employees’ choices regarding the care they receive — and those choices drive future health plan decisions as you tailor and customize your coverage and access in years two and beyond.

An influential HR department that communicates openly and effectively with employees can help your company save money and get better care, improving both the savings and quality of a self-funded insurance plan. Your HR team should educate employees on benefits and incentivize them to participate in well-being programs and other cost-saving plan features.

Explore the Benefits of Self-Funded Health Insurance From Roundstone

If you’re ready to ditch high premiums and lack of control regarding your company’s health insurance, switch to Roundstone’s self-funded insurance solution today. Our self-insured group captive insurance gives you the freedom to cut costs with out-of-the-box cost containment solutions and 20%  savings on healthcare expenses.

What’s more, we return your unused premiums each year so you can put the funds toward better solutions for your plan members.

To Learn More

To help you decide whether self-funded insurance is right for you, download our helpful checklist.

You can also download our free eBook to learn more about how our commitment to data transparency can help you lower insurance costs.