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Self Funding

There are several good reasons why employers often choose the self-insurance option for a Group Medical Insurance Program. The most common reasons Employers decide to "Self-Fund" or "Partially Self-Fund" using a combination of a third party to adjudicate and pay claims and the protection of re-insurance are:

1. The employer can customize the plan to meet the specific health care needs of its workforce, as opposed to purchasing a 'one-size-fits-all' insurance policy.

2. The employer maintains control over the health plan reserves, enabling maximization of interest income - income that would be otherwise generated by an insurance carrier through the investment of premium dollars.

3. The employer does not have to pre-pay for coverage, thereby providing for improved cash flow.

4. The employer is not subject to conflicting state health insurance regulations/benefit mandates, as self-insured health plans are regulated under a federal law (ERISA).

5. The employer is not subject to state health insurance premium taxes, which are generally 2-3 percent of the premium's dollar value.

6. The employer is free to contract with the providers or provider network best suited to meet the health care needs of its employees.

7. The employer can truly engage in "active claims management" via user friendly reports, utilization review and re-pricing negotiations.

8. The employer can more easily set their benefit plan apart from their competition via customization and creativity while explaining that this health plan is the employee's plan with ownership-not an insurance company's plan.
 
Proliance Guiding Principles
Leadership: “The essential quality for leadership is not perfection, but credibility.”
Provide “Choice”
Full disclosure in advance—”know the deal”
Voluntary alliance participation (provider and distributor)
Success-sharing revenue formula with provider
Active oversight of providers and distributors (due diligence after-the-fact)
Consistent and predictable delivery
Constantly seek improvement
Assess opportunities objectively and without prejudice
 
       
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