Highlights
- “Why self-funding?” is a common question we hear from HR teams and management. “How will the change affect our employees?” is another.
- The truth is, your employees won’t notice a difference. They will retain the same healthcare access, claims process, and benefit materials, ensuring familiarity and ease of use in a self-funded plan.
- Some elements of self-funding actually improve the employee experience, such as customer service, lower out-of-pocket costs, and better access to relevant and affordable services.
- Self-funding with a Roundstone group captive offers cost savings and a better healthcare experience to employers and employees alike.
If your company is dealing with high costs and poor coverage in a traditional health insurance plan, a self-funded arrangement could be a great solution. It allows you to manage your own healthcare funds, which can lead to more cost-effective and customized employee benefits. You only pay for the insurance you use — and you get to keep what you don’t spend. For smaller companies, joining a group captive as part of a self-funded arrangement can help avoid the rising costs and opacity of fully insured plans.
Despite the benefits of self-funded health insurance, your HR team and leaders may have concerns about self-funding, such as its impact on provider access, the complexity of claims, and employee costs. The truth, however, is that a self-funded model can help you pay less for better coverage while keeping things the same for your employees.
Ideally, your employees shouldn’t notice a difference in a self-funded plan. They use similar ID cards, access a network of providers, and receive similar subscription rebates. Many employees might not even realize their company is on a self-funded plan. But the employer can save a lot of money, and these savings can be passed onto the employee with less money taken from their paycheck to pay for their health plan.
Discover why self-funding can benefit your small to midsize business by offering improved benefits at a lower cost without changing your employees’ experience.
The Employee Experience
Make no mistake, self-funded employee benefits can make a big difference in terms of healthcare expenses for your company. With self-funding, you can custom-design your own plan and choose coverage that aligns with your team’s needs. This means fewer unnecessary expenses and the possibility of seeing returns on unspent premiums at the end of the year.
However, from the employees’ perspective, the differences in a self-funded health insurance vs. a traditional plan are minimal. When you move to self-funded employee benefits for small businesses, the following elements remain the same.
- Healthcare access. Employees will continue to enjoy the same access to healthcare services they had under traditional plans, including a wide network of doctors, hospitals, and clinics. This ensures they can choose their preferred providers without facing any new restrictions.
- Claims process. The process for submitting claims remains unchanged in a self-funded plan; employees can file their claims in the same way they are accustomed to, with the added assurance that a third-party administrator (TPA) handles claims smoothly and invisibly.
- Benefit cards and materials. Insurance cards and related materials, such as benefit summaries and policy documents, will still look and function exactly as they did before. This makes it easy for employees to use their benefits without having to adapt to new systems.
- Coverage terms. The coverage terms, including deductibles, copays, and out-of-pocket maximums, are structured to be very similar to those in traditional plans, which helps ensure that employees experience no unexpected changes in how their coverage works.
- Improved customer service and support. The level of customer service and support in self-funded plans is often better than in traditional plans. Specialized TPAs provide employees with timely and thorough assistance in understanding their benefits, addressing coverage inquiries, resolving any issues with claims, and ensuring a supportive insurance experience.
- Health benefits and wellness programs. Self-funded plans frequently offer wellness programs and health benefits that match or exceed those available through fully insured plans. These programs might include preventative health screenings and discounts on wellness-related activities, which show the employer’s commitment to maintaining and improving employee health.
With self-funding, employees do have some control over cost — choosing lower-cost pharmacies and doctors, minimizing urgent care and emergency room visits for example. This flexibility can create some amount of work on the part of the employee, but it’s good work that results in lower copays and out-of-pocket expenditures. By taking advantage of these savings, employees directly benefit from the savings of self-funded health insurance.
What Might Change for Employees?
While a self-funded plan maintains consistency with most traditional health insurance features, a few things may change. These changes often include lower costs and more personalized benefits, offering a better overall experience.
- Lower healthcare costs. Unlike traditional plans, the cost savings of self-funded health plans extend to employees. Self-funded plans allow for more direct control over copays, deductibles, and spending, leading to cost savings that can be passed down through lower premiums and fewer out-of-pocket expenses.
- One company that switched to a self-funded plan was able to lower deductibles from $6,000 to $0 and minimize copays, resulting in improved employee satisfaction.
- More flexibility in services. Self-funded plans offer greater flexibility in choosing healthcare services, enabling access to a variety of options, such as Centers of Excellence (CoE), direct primary care programs, telehealth services, and behavioral health support.
- For instance, a recovery center that moved to self-funding was able to implement a primary care program based on its unique resources. This boosted access to preventative care and reduced copays to $0 for the service.
- Improved well-being. The combination of lower costs, increased service flexibility, and dedicated well-being programs improves employee well-being. Increased benefits utilization can mean more use of preventive services, joining the gym, or seeking mental health treatment, leading to reduced absenteeism and higher productivity.
- One wellness partner that offered its program to self-funded plan members at no additional cost helped employees focus on nutritional and weight loss goals. The final result positively impacted employees’ lifestyles and long-term well-being.
- Better managed care. Self-funded plans support improved care management for employees. This can include better access to high-cost medications and dedicated care teams for conditions like diabetes. These teams work closely with employees to manage chronic conditions, coordinate treatment plans, and ensure that care is timely, effective, and aligned with the best health outcomes.
- Roundtone’s own employees benefit from self-funded benefits administration. By implementing flexible coverages, well-being programs, and access to low-cost medications, we’ve kept cost-sharing obligations stable for the last eight years and boosted employee health and job satisfaction.
The Role of Data and Cost Management
In a self-funded health insurance plan, understanding claims data is crucial to the overall cost of self-funded employee benefits. As an employer, you have access to comprehensive claims data, which you can analyze to understand health trends and cost drivers within your workforce.
Real-time insight into claims usage allows you to tailor benefits to meet specific employee needs. For instance, you can compare your claims to industry benchmarks to discover over- or underutilization. With this data, you might increase coverage for behavioral health or look into Pharmacy Benefits Managers (PBMs), which can help you access medication discounts for specific drugs.
You can negotiate better rates with providers by identifying high-cost areas or introducing more cost-effective treatment options, such as telehealth over urgent care. This data-driven approach manages costs efficiently and improves health outcomes by ensuring employees receive the most relevant and high-quality care.
Roundstone’s Unique Approach
Roundstone is an innovative employee health benefits company. We help small and midsize businesses offer competitive benefits at a lower cost by self-funding health insurance through our group medical captive. The Roundstone Captive enables companies to self-insure safely by pooling hundreds of employers together to share risk and save money.
With easy onboarding and personalized support every step of the way, the Captive offers control, flexibility, and transparency and returns all savings back to employers where they belong. We believe in always aligning with the employers’ best interests and remain committed to our mission — quality, affordable healthcare and a better life for all.
What makes us different from other providers of group captive insurance? Here’s the Roundstone difference:
- Qualified support. From onboarding to plan implementation, we provide well-rounded support for your affordable employee health insurance plan. We connect you with vendors, TPAs, and advisors, ensuring seamless integration and expert guidance at every step.
- Transparent claims data tools. Our Cost Savings Investigators (CSI) dashboard provides easy access to detailed claims data, offering automated reporting, HIPAA compliance, benchmarking capabilities, and assistance from our CSI team to help employers make informed decisions and contain costs.
- Group captive arrangement. The Roundstone Captive pools hundreds of employers together to share risk and save money, offering the same level of risk predictability and cost control typically enjoyed by larger corporations.
- Roundstone guarantee. We guarantee that you will save money in the first five years or we will make up the difference. This commitment reflects our confidence in our model and dedication to providing cost-effective solutions. The Validation Institute found that employers in the Roundstone Captive have significantly lower per member per year costs than a full-insured plan.
- Premium returns. You can expect returns on 100% of your unused premiums. We’ve given back $72 million in distributions over the last 20 years, allowing employers to use the savings as they see fit, whether reinvesting in their business or increasing employee benefits.
Explore Roundstone’s Group Captive Insurance Today
Want to change things up while keeping them the same from an employee experience perspective? Explore a group captive plan as part of a self-funded arrangement with Roundstone. We can help you transition to a self-funded plan that gives you all the benefits of managing your own plan while maintaining consistency and familiarity for your employees.
Speak with Roundstone today to learn how you can keep your current healthcare benefits system for a seamless transition and potential future savings.
