How A Small Not-for-Profit Business Self-Funded its Health Benefits
By Melina Kambitsi, Ph.D.
Why did The Alliance choose to self-fund their health benefits?
The Alliance aims to serve as the voice for self-funded employers, yet we ourselves were not yet self-funded due to our size (23 plan participants). Because we strive to remain a trusted partner to our employers and their brokers, we wanted to make the same investment into our employees that our members were making and showcase to our 300 employer-members that we’re taking the same risks and fighting the same fight.
What was the biggest challenge of self-funding such a small health plan?
The challenge is always going to be lack of data during your first year. You know you’ll save money down the road, but you have no data to start.
That said, because we’ve been working with great clients and partners for over 30 years, we were able to lean on a broker who is an expert in self-funding. Jeff Ireland, from M3, was able to obtain sufficient data from the HMO with which we were insured, so our stop-loss quote ended up being very competitive.
At the end of the day, self-funding is about having the right partners; it’s extremely important to have a good consultant who knows self-funding well and has great relationships with payers and stop-loss carriers.
What benefits do you offer as a small organization?
Our covered employees and their spouses can earn up to $2,000 towards their HSA. We offer an on-site flu shot clinic every year and a wellness incentive (cash) for completing biometric screenings. We also offer an EAP and Teledoc through WPS.
If you could give one piece of advice to someone in your shoes looking to design a health benefits plan for their small business, what would it be?
Follow the money. Ask where it goes. Look at your data, and if you don’t yet have data, find data that is relative to you. I recommend using a straight PEPM (per employee per month) consultant fee with your partners, so you know where the money is going. Transparency is key. As we at The Alliance like to say, “sunshine is the best disinfectant.”
What excites you the most about self-funding?
When you self-fund, you’re very much in control of your own destiny. Knowing the cost-saving mechanisms, where the money is going, and being able to put all the pieces together to offer very good care for your employees is a great feeling; we’re not beholden to a carrier who wants to increase our renewal by 30% without good reason. It feels very strategic and that we are in complete control of our health plan outcomes. We have not decreased our benefits – we have a robust plan and we’ve kept it up for 3+ years. We want to continue offering great benefits moving forward, and self-funding allows us to do that.
We’ve added over 900 behavioral health providers to our Comprehensive Network this past year. Using steerage opportunities through our 32,000-physician network has vastly improved our employees’ access to High-Value Health Care.
If an employer wants to self-fund with The Alliance, or has questions about self-funding in general, what should they do?
I invite any employer that is considering self-funding to reach out to me. I am more than happy to discuss the X’s and O’s of self-funding with any employer or broker, regardless of their size or affiliation with The Alliance.
You can reach Melina by sending an email to email@example.com.