In the wake of ongoing insurance legislation, many employers have found that it is financially appealing for them to forgo a relationship with an insurance carrier. Self-funded medical insurance plans essentially make the employers themselves the insurers for their employees. This avoids the expensive and entangling relationship with carriers that can make securing health benefits so difficult.
However, companies need to keep in mind that starting such plans requires complying with many federal and state regulations. For instance, the most recent national healthcare bill requires that children be allowed to stay on their parents' insurance plans until age 26. Failure to account for this with a self-funded plan can lead to either high-cost fines or expensive plans that aren't affordable.
Some employers who have had self-funded plans in effect for years may be grandfathered in and can consequently maintain their original benefit structure. However, to do this legally (and to be mindful of other rules and regulations), it can be very beneficial for companies to use the services of an employee benefit consultant. These professionals can help organizations understand their obligations to workers as they attempt to cut costs while providing superior coverage.
