Discover Personalized Health Coverage
Self-Funded Medical Plans for Small Businesses
Did you know that as a small business or sole proprietor, you can pick your own personalized self-funded medical plan? It’s a flexible, cost-saving alternative to traditional health coverage that can be customized to suit your unique needs.
Key Features of Self-Funded Medical Plans
Flexibility
Customize your health plan to fit your specific needs and budget, choosing from over 80,000 options and combinations.
Cost Savings
Save money by only paying for the healthcare you use. Unused funds are returned to you, unlike traditional plans where the insurance carrier keeps everything.
Protection
Stop-loss coverage ensures you are protected from unexpected high medical expenses, giving you peace of mind.
Advantages of Self-Funded Plans
Maximizing Your Healthcare Dollars
One of the greatest benefits of a self-funded medical plan is the ability to keep unspent funds. Unlike traditional plans where the insurance carrier retains any unused money, self-funded plans allow you to retain control over your healthcare budget. If your medical expenses are lower than expected, the remaining funds stay with you, providing a significant financial advantage.
This means that in a healthy year, you could potentially save thousands of dollars. Instead of losing your money to an insurance company, you can reinvest those savings back into your business or use them to enhance your employees’ benefits. This flexibility and potential for savings make self-funded plans an attractive option for many small businesses and sole proprietors.
What is a Self-Funded Medical Plan?
Here is a quick snap shot… With a traditional medical plan, you typically choose from one or two pre-designed options and a premium paid to an insurance career. The carrier collects those premiums and administers the plan for you. You’ll receive an Explanation of Benefits showing how they have applied a medical bill towards your deductible, out of pocket limits, the amount you will pay and the amount they will pay. At the end of the year everything resets to zero and starts over.
A self-funded plan will do all of the above and will go a step further. YOU can design the coverage you want rather than just picking from one or two prepared plans that the carrier offers. Additionally, the self-funded plan will break down your monthly premium into 3 elements: the cost for benefits administration, the cost for stop loss/ major medical coverage, and the amount to be set aside to cover your anticipated annual medical claims.
Let’s take a closer look at how a self-funded medical plan works. Imagine you’re a small business owner setting up your own plan.
Here’s a simple breakdown of the costs involved:
Administration Costs: $100
Stop-Loss Coverage: $300
Medical Claims: $600 ($600 x 12 = $7,200 for estimated annual medical claims)
Premium: $1,000
What Happens in a Bad Year?
If you have a healthy year and don’t use all $7,200 in medical claims, that money comes back to you. Unlike traditional plans, where the insurance carrier keeps everything, self-funded plans give you control over your healthcare spending.
You have choices!
If your medical expenses exceed the amount you’ve set aside for claims, don’t worry. That’s where your stop-loss coverage kicks in, protecting you from any unexpected high costs.
While this is a simplified example, the reality is that you can customize your plan with over 80,000 options and combinations—designing coverage that fits both your needs and your budget.
Choose Your Ideal Medical Plan
Self-Funded vs. Fully Funded Plans
When it comes to selecting a medical plan, you have two primary options: self-funded and fully funded plans. Each offers unique advantages and can be tailored to meet your specific needs. Understanding the differences between these plans can help you make an informed decision that aligns with your business goals and budget.
Tailor Your Coverage
Self-funded plans provide unparalleled flexibility, allowing you to design a plan that fits your exact requirements. You control the administration costs, stop-loss coverage, and medical claims, ensuring that you only pay for what you need. On the other hand, fully funded plans offer simplicity and predictability, with fixed premiums and comprehensive coverage managed by the insurance carrier.
Plans for Individuals
Another option gaining popularity is the member only healthcare cooperative. This is appropriate for those who cannot form an employer group, are in good health, and want protection in the event something unforeseen happens. A member only healthcare cooperative offers relief from high cost/ low benefit of traditional health insurance plans.
NOTE: This option is a coop, it is NOT insurance. Not available in AK or NH
Explore Your Options Today with TGray & Company
Ready to discover the best medical plan for your business? Whether you prefer the flexibility of a self-funded plan or the simplicity of a fully funded plan, TGray & Company is here to help. Our experts will guide you through the process, ensuring you find the perfect solution to meet your needs.