In this article, Paul Johnson writes for Employee Benefit Advisor about self-insurance as a solution to rising healthcare costs and a stable solution regardless of ACA outcomes.
Read the full original article from Employee Benefit Advisor.
"For years, health insurance rates have increased sharply, even for companies with very low utilization. Companies have been forced to shell out more and more cash — usually for less coverage and very little real 'healthcare.'" Small- to mid-size employers have been forced to choose between undesirable options - pay higher premiums, cut coverage, pass the cost to employees, or start reducing the size of their workforces.
Large employers have traditionally been able to enjoy the benefits of self-insurance to reduce the cost of providing healthcare benefits. With a large pool of people insured, risk of catasrophic loss is greatly reduced. Smaller employers typically do not have the reserve funds to cover a high claims year, especially early on, but partial self-insurance helps mediate that issue while still delivering a baseline savings of 12.5%. Learn more about partial self-insurance and how your organization can benefit in our Quick Guide to Partial Self-Insurance:
The information and materials herein are provided for general information purposes only and are not intended to constitute legal or other advice or opinions on any specific matters and are not intended to replace the advice of a qualified attorney, plan provider or other professional advisor. This information has been taken from sources believed to be reliable, but there is no guarantee as to its accuracy. In accordance with IRS Circular 230, this communication is not intended or written to be used, and cannot be used as or considered a ‘covered opinion’ or other written tax advice and should not be relied upon for any purpose other than its intended purpose