Self-funded health plans are becoming more popular among companies that want more control over the health insurance benefits they offer to their employees.

Saving money is certainly one reason companies are choosing self-funded health plans. Another is the ability to craft a plan that is tailored to their employees’ health and wellness needs.

How self-funded health plans work
Employers have full control over the design, administration and funding of the health benefits they provide to their employees. Self-funding is different from fully insured plans in a few ways:

• An employer chooses what benefits they’ll cover and at what level, as well as the deductible an employee must meet before the company starts paying for health care costs.
• Each month employers pay the exact amount of health care costs for which they are responsible rather than paying a fixed premium to an insurance carrier.
• Employers determine what added services they want to include in their medical plan, such as wellness, disease management or an HSA program.

Containing costs with a self-funded health plan
Employers with self-funded plans can choose to purchase stop loss insurance to manage some of the financial risk associated with funding their own health plans.

Stop loss insurance covers costs after the employer has paid a negotiated amount (the deductible) toward employees’ covered medical expenses. Often stop loss insurance comes into play when an employee has an accident, needs a transplant or is diagnosed with a serious illness.

With health care reform, employers may no longer cap lifetime benefits for employee health care coverage. As a result, many are considering self-funded plans with stop loss coverage as a way to continue offering important health benefits while managing their financial risk.

OptumHealth Stop Loss products are underwritten by Unimerica Insurance Company, and in California, Unimerica Life Insurance Company.