SOURCE: Business Benefits Insurance

June 25, 2008 14:15 ET

Self-Funding Health Insurance Can Work for Even Small Employers, Edholm Writes in Employee Benefit News

ANDOVER, MA--(Marketwire - June 25, 2008) - Switching from traditional health insurance to "self-funding" raises many concerns for employers. Considered risky by some, this move can make key decision-makers hesitant.

In his article, "Ask These 14 Questions Before Self-funding Your Health Insurance Plan," in a recent edition of Employee Benefit News, benefits expert Jim Edholm addresses this anxiety and explains how self-funding your health insurance can benefit your business.

Edholm says, "It's no secret that higher deductibles on other insurance products can reduce your fixed costs... will it work for health insurance, too? The answer is, yes, you can potentially profit from self-funding, but be sure to look before you leap."

With partial self-funding, "You're not going to pay all your company's health claims. Rather, you partner with an insurer: you pay the small, frequent claims and the carrier pays the larger, infrequent and unaffordable claims."

Edholm covers who should consider self-funding, and the characteristics that make for a good match. His 14 questions let readers perform a self-assessment.

He lays out the main factors that contribute to the unpredictability of employee health. "Self-funding is different, and you have to familiarize yourself with new terms and risks... However, if your broker knows his or her self-funding 'stuff' it's no more complicated than traditional insurance."

"Properly planned for and using a knowledgeable broker, self-funding can work for companies of surprisingly small size," he concludes. "Evaluate your alternatives carefully -- this is a tool you shouldn't ignore."

The full article can be read online at http://tinyurl.com/4pv49j.

Edholm is president of Business Benefits Insurance (BBI), an employee benefits planning firm in Andover, Mass. He has worked with employers for more than 25 years and can be contacted at (978) 474-4730, via his website www.Group-Insurance-Guide.com or via e-mail jedholm@bbibenefits.com

Contact Information