“Hybrid” Self Funding (Level Funded, Aggregate Only, Spaggregate)
Program Summary
Self funding option that provides a capitated (stable) healthcare expense, with changes based solely on enrollment fluctuations. Program includes refund component with 100% return of unused claims fund dollars. As a self funded program, this is governed by ERISA and avoids state mandates (but follows certain ACA “Obamacare” provisions) and allows full plan flexibility. Third Party Administration (TPA) provides responsive and personalized customer service, as well as full access to employer’s claims data. Data access and TPA claims review allows employer to make informed decisions regarding their benefit plan. Best option for long term cost control of healthcare expenses. Finally, both HR staff and employees have access to their respective data via dedicated web portal.
“Traditional” Self Funding (Specific & Aggregate)
Pros: Provides employer group all of the self funded advantages noted in hybrid program summary, while also reducing fixed cost expense.
Cons: Typical claim funding model requires employer group to “fund as you go”, thus requiring the ability to absorb claim spikes between funding cycles. This can create a cash flow concern for some employer groups. Limited carrier market.
“Flex Funded” Self Funding
Pros: Like the hybrid program, this option provides a capitated (stable) healthcare expense, with changes based solely on enrollment fluctuations. True specific deductible to protect against large claims, rather than an underwriting corridor or pooling point in standard hybrid programs. Typically lower fixed costs as compared to standard hybrid programs.
Cons: Most carriers require claims data in order to provide Flex Funding quote. Limited carrier market.
Other Options - VEBA Trust
Pros: Like the hybrid program, this option provides a capitated (stable) healthcare expense, with changes based solely on enrollment fluctuations. Available to groups with as few as two (2) employees, and there is no minimum participation requirement or employer contribution requirement. Multiple plan options and rates are the same nationwide.
Cons: Limited to the plan options provided by the vendor with no changes allowed. Premium rates change for all plans and participating employer groups on January 1st each year. Therefore, if the original effective date is not January 1st, your premium rates will change before the typical 12 month contract cycle. Plan administration is handled by two (2) Third Party Administrators and varies based on the plan(s) elected. As such, the employer group will not receive any claims data from the vendor, and customer service will be limited.