Products and Services

Self-Funded Employee Benefit Plan Administration

Significa Benefit Services takes a comprehensive approach to self-funded plan administration. We have core competencies in the following areas:

  • Health Plan Administration
  • Dental/Vision Plan Administration
  • Disability Plan Administration
  • COBRA Administration
  • Stop-Loss Coverage
  • Plan Document Preparation
  • Prescription Drug (Rx) Management
  • Preferred Provider Networks
  • Utilization Management
  • Alternative Self-Funded Plans – Health Reimbursement Arrangements (HRAs) and Medical Expense Reimbursement Plans (MERPS)
  • Regulatory Compliance

What is a Self-Funded Employee Benefit Plan?

In its purest form, a self-funded employee benefit plan is one in which the employer pays members’ eligible claims. This is different from a fully insured employee benefit plan where the employer pays premiums to an insurance company, which then assumes the risk for paying members’ eligible claims.

Almost any type of employee benefit plan can be self-funded, including health, dental, vision, and disability plans. In the case of health plans, employers that self-fund usually purchase indemnity policies, called “stop-loss” or “reinsurance” to protect against higher than expected individual and group claims.

What are the Advantages of Self-funding?

Many employers are finding that insurance is taking too big of a bite from their benefits budgets. Self-funding can be a way to save benefit dollars and improve cash flow:

  • Self-Funded plans are not subject to premium taxes.
  • Self-Funded plans do not require prepayment of claims; claims may be paid as they are incurred.
  • Self-Funded plans are exempt from state mandated benefits which drive up costs.
  • Self-Funded plans avoid insurance companies’ “one- size-fits-all” approach. Benefit design is infinitely flexible and can be tailored to suit the employer’s budget and workforce.
  • Self-Funded plans afford uniformity to employers with multi-state operations.
  • Self-Funded plans free the employer from having to pay premiums that help subsidize the insurance company’s sickest members, overhead costs, and profits.
  • Self-Funded plans allow the employer to choose the most efficient and cost-effective method of plan administration.

Is Administration Important to a Self-Funded Employee Benefit Plan?

While the plan can be administered in-house by the employer, administration is usually subcontracted to a Third Party Administrator.

At Significa Benefit Services we recognize that the proper selection of a Third Party Administrator is crucial to the success of a self-funded plan. Not only is it important to provide all the necessary administrative and support services, Significa Benefit Services understands the synergy that must exist between the Third Party Administrator and the employer.