Lots of benefits to self-insured plans

A self-insured plan has many advantages over a fully insured plan. They are exempt from the state-mandated benefits. An approved Employee Retirement Income Security Act plan must meet federal mandates such a treating pregnancy and providing some benefit for mental care and a few other conditions.

Excepting pregnancy, the benefit can be limited. Such as requiring a specified number of hospital in-patient care for alcoholism and no payment for out patient care.

These plans are safe. The employer funds the plan and buys reinsurance to cover large claims. If insurance brokers can be prevented from trying to take a cut of administrators fee the administrative cost should be less than 10 percent of the total plan cost.

The Society of Professional Benefits Administrators can provide a referral to an experienced firm. While many administrators have competent personnel to design a plan and offer consulting service at no additional charge, large brokerage firms are needed to place the reinsurance. They of course receive a commission and many add on a fee for consulting. An administrator should receive a fee or commission from an insurance company.

There are many ways self-insurance benefits the employer and it is safe. The Affordable Health Care Act actually encourages self-funded plans.

Don Brown

Everett

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