Our team of licensed, Marketplace-
certified agents and brokers are
here to help you. Whether you’re
needing individual, family or
insurance, we will help you find a
plan that fits your needs and fits
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Local: (913) 385-2224
Wichita: (316) 263-2900
Toll Free: (877) 385-2224
© Benefits By Design 2015
WHAT WE DO…
Local: (913) 385-2224
Wichita: (316) 263-2900
Toll Free: (877) 385-2224
Employer / Group
The marketplace is changing and costs are rising. Let us show you the most effective plans that can help you control your health
insurance costs, whether you have a group of 2 or 200 lives.
If you are a small business, organization, a municipality or group in need of a health insurance plan for your employees or
members, Benefits By Design can help you.
We represent only the premier insurance companies and give you the current overview of what is available on and off the
Marketplace. Therefore, we can design the right plan, with the best coverage to fit the needs and budget of your
In many cases Benefits By Design has reduced employer’s health insurance costs by as much as thirty percent by providing
innovative solutions like partially self-funded, level premium, and captive plans that won’t pay the five percent ObamaCare tax and
are not subject to community rating.
When your employees are dealing with claims and provider issues, we become your advocate in finding, enrolling and maintaining
a health plan.
Download our white paper on benefits of self-funding.
There are three models: Partially self-funded, Captive, and Level-Funded Premium payment plans for groups as small as
There are 2 models: stand-alone self-funding and the captive model.
Under a fully-insured health benefit plan, an insurance company assumes the financial risk of loss in exchange for a fixed premium
paid to the carrier by the employer. Employers with self-funded plans retain the risk of paying a defined portion for their employees’
health care cost (up to a limit, typically between $10, 000 - $25,000) themselves, then the reinsurance carrier steps in.
Most employers with more than 200 employees self-insure some or all of their employee health benefits. Employers with fewer than
200 employees also commonly self-fund, but these employers require greater stop-loss insurance protection than larger employers.
As a general rule, employers with less than 50 employees fully-insure their group medical benefits.
Employer owned group captives allow smaller employers (50-500 employees) to reap the benefits of self-funding while minimizing
their risk and volatility. As compared to a fully insured program, captive programs offer the employer:
• Projected costs (expenses plus claims) estimated to be 4-8% lower in the first year (and potentially compounding after that)
• Funding (cash out the door) similar to fully-insured
• Limited one-year downside of approximately 15% of their fully-insured premium
(Very little, if any, additional risk when viewing across multiple years)
Level-Funded Premium Plans
A Level-Funded Premium plan is a self-funded option for employers with less than 50 employees, including groups with as few as
five employees. Employers pay the same premium every month for the plan year, and are not subject to the community rating
process or 4 percent Obamacare taxes. These are also known as Administrative Services Only (ASO) plans.
No Obama tax or community rating.
Self-funded health plans are governed by the Employee Retirement Income Security Act of 1974 (ERISA). ERISA preempts state
insurance regulations, meaning that employers with self-funded medical benefits are not required to comply with state insurance
laws that apply to medical benefit plan administrators. On the other hand, insured plans must comply with some of ERISA’s
requirements, but are primarily governed by the state where covered employees reside.
The distinction between state and ERISA regulations is important when determining if self-funding is right for an organization. Multi-
state companies with insured health plans must comply with the regulations of each state in which they have plans and covered
employees. Multi-state self-funded plans need only comply with ERISA
What are some of the Components of Self-Funding?
The risk an insurance company takes with an insured plan can be translated into a dollar amount for the employer. That dollar
amount is the premium an employer pays each month for the insured group medical benefits. The premium amount includes the
Current and predicted claims cost (employer pays)
Administrative fee (not paid)
Premium tax paid to the state (not paid)
Insurance company profit (not paid)
Employers who self-fund their medical benefits do not pay the premium tax or insurance company profit. They do, however,
assume the costs of paying for claims and administrative functions Typically, employers with self-funded health plans will outsource
plan administration to a third party administrator (TPA) or insurance company who charges the employer a fee for performing
Employers with self-funded health plans typically carry stop-loss insurance to reduce the risk associated with large individual claims
or high claims from the entire plan. The employer self-insures up to the stop-loss attachment point, which is the dollar amount
above which the stop-loss carrier will reimburse claims. Stop-loss insurance comes in two forms: individual/specific stop-loss
insurance and aggregate stop-loss insurance
Individual/Specific Stop-loss Insurance
Individual/specific stop-loss insurance protects a self-funded employer against large, individual health care claims. Essentially, it
limits the amount that the employer must pay on a specific individual. For example, an employer with a specific stop-loss
attachment point of $25,000 would be responsible for the first $25,000 in claims for each individual plan participant each year. The
stop-loss carrier would pay any claims exceeding $25,000 in a calendar year for a particular participant.
Aggregate Stop-loss Insurance
Aggregate stop-loss insurance protects the employer against high total claims for the health care plan. For example, aggregate
stop-loss insurance with an attachment point of $250,000 would begin paying for claims after the plan’s overall claims exceeded
$250,000. Any amounts paid by a specific stop-loss policy for the same plan would not count towards the aggregate attachment
Why Do Employers Choose Self-Funding?
Answer: To control their health insurance costs.
An employer may choose to offer a self-funded health insurance plan for a number of reasons.
Instead of trying to purchase a “one size fits all” health plan, self-funded plans can be customized to fit the needs of an employer’s
Employers with self-funded plans control the health plan cash reserves, allowing them to maximize interest income (insurance
companies otherwise generate interest income for themselves by investing premium dollars).
Self-funded coverage is not prepaid, as it is when the employer pays premiums to an insurance company. Therefore, companies
who self-fund their health plans have improved cash flow.
Self-funded plans are not subject to conflicting state health insurance regulations and benefits mandates. Instead, these plans are
regulated by federal law.
Employers with self-funded plans are not subject to state health insurance premium taxes.
Employers can contract with the providers or a particular provider network that will best meet the needs of its employees.
Contact us about our Employer/Group plan options.