As a small business owner, you know that offering benefits is one of the keys to finding and keeping the best employees. On the other hand, offering a fully-funded health insurance plan may be out of your financial grasp. A self-insured plan can be the answer you are looking for. Self-insured plans allow businesses to offer health insurance while keeping prices low. Here’s how.
How Does It Work?
The employer evaluates the fixed and variable costs of a health plan over the next year. Fixed costs include the cost of administering the plan; variable costs are the expected costs of claims each month. The employer will set aside funds from the business as well as the paycheck withholding from employees in order to pay claims as they arise.
How Does It Save Money?
This means that your company and your employees aren’t stuck paying premiums for services they never use. Besides lower costs, as the employer, you can save money, and save money for your employees, by using a wellness program and paying for telemedicine services.
While funds are still in holding for claims the business can invest and grow them. You’ll also avoid state health insurance premium taxes.
Self-funding provides an effective solution for small businesses that want to provide health coverage on a tight budget.