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Self Funding: Is It Right For You?

Self funding has become a common term, but often not well understood. A self funded, or self-insured, health plan is when an employer funds the health care benefits for its employees by paying claims as they are incurred, rather than paying a pre-determined premium to an insurance carrier. Self funding is an attractive option for many employers for several reasons:

  • Ability to customize health plans to meet specific needs of the employers’ workforce
  • Control over health plan reserves as opposed to signing over that reserve to an insurance carrier
  • Operation under federal (ERISA) law rather than being subjected to state mandates
  • Ability to contract with vendors and providers that are best suited for the workforce

The financial upside to a self funded health plan is evident, but it’s not a fit for all employers. Employers must have an adequate cash flow to protect against unpredictable claims cost. Most self funded employers purchase stop-loss insurance to protect against high claims cost, but these employers must meet funding up to a specified level before stop-loss will reimburse.

SISCO is a third-party benefit administration firm that helps our partners recruit and retain talent by controlling cost and complexity of the benefits delivered to their employees.  While our suite of services range beyond the administration of self funded health plans, we’ve administered self funded health plans since 1980. Unlike other third-party administrators, we answer our phones with licensed client service representatives and manually adjudicate 75% of our claims to ensure that human curiosity and professionalism are in place with every interaction. In 2018 alone, we delivered a 17% of savings to our clients and resolved 85% of our calls in less than 6 minutes.

For more information about SISCO and our suite of services, please contact Heather Harper at hharper@siscobenefits.com