Webinar
April 20, 2020

Making a mid-year switch to self-funding | Webinar with Simon Elliott

Dean Graham

Simon Elliott, Flume Health’s Director of Account Management, discusses the pros and cons of making a mid-year switch to self-funding and how to make the switch successfully.


Q: Before we get into a mid-year switch specifically, why might an employer want to consider self-funding in general?

It saves money.

  • You only pay for the healthcare your employees use in a given year. An expensive year doesn’t drive up your premiums in the future.
  • You get to decide how much financial risk you want to take on.
  • There are automatic tax advantages.

Cost control tools put you in the driver’s seat of your plan.

You have more decision-making power over your own plan.

You have more transparency into your healthcare spend, which provides opportunities to improve the plan and save money.


Q: What are some risks and benefits of switching to self-funding in the middle of the plan year.

Risks

  • Self-funding can be challenging for members who haven’t been engaged in their healthcare before.
  • You have to deal with new ID cards and possibly another Open Enrollment.
  • You may have to deal with doctor’s offices that are unfamiliar with self-funding, particularly if you move to an RBP plan.
  • If you’re on a level-funded plan, that’s not the same as self-funding, and there may be runout claims you need to address.

Benefits

  • Eliminate conflicts on interest in your health plan.
  • Cost-saving features such as telemedicine favor your bottom line, not your insurance carrier’s.
  • You can add features like care navigation and advocacy and drive down costs.

Other considerations

  • Your renewal date might change.
  • You might discover you need a different benefits advisor.
  • You’ll have a new network, or potentially no network, which means disruption. However, the current business and economic situation may make members more open to change.


Q: If a group does decide to make the mid-year switch, can you give some practical advice for how they should go about it?

  1. Make sure your benefits advisor is up to the challenge
  2. Make sure you get claims data from your current plan before getting out of the contract. Getting out of the contract itself is actually pretty easy
  3. Be patient, and allow enough time to make the transition smoothly. Make sure telemedicine and Rx and ready to go by Day 1 of the new plan.
  4. Use the transition time for employee education. Don’t just teach them how to use the plan, also teach them how to respond when it doesn’t seem to work seamlessly.
  5. Expect some difficulty, and be upfront and honest about that with all the parties involved. Switching to self-funding involves some extra effort, but for many employers it’s worth it.

Simon Elliott is Director, Account Management at Flume Health.

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