Metro Area Group Insurance Consultants, Inc.

WHY SELF-FUND?

INCREASED CASH FLOW

A self-funded plan does not require pre-funding of future claims, reserves or inflation. This allows the employer full usage of working capital and interest earnings on monies in the insurance fund.

Fixed costs of a self-funded plan are normally less than those of a conventional fully insured plan. Savings result from lower claims administrative costs, premium taxes, commissions overhead, and etc.

EMPLOYER CONTROL

The employer can develop a plan of benefits tailored to employees' needs. The employer has complete control and knowledge of where and how contributions are distributed.

SHARE IN RISK

Excess-loss insurance protects the employer in a "bad" claims year. In a "good" claims year, the savings in paid claims are available immediately since the funds remain in the employers control.

Employers with as few as 15 employees are finding that self-funding is a very effective alternative to traditional group medical insurance.

WHAT IS SELF-FUNDING?

Self-funding is based on the concept that health insurance is designed to protect against two different areas of exposure:

Predictable costs should be funded and self-paid by the employer. Purchasing insurance to cover predictable claims is not cost effective due to loads in the insurance carrier's premiums. Typically a premium includes loads for overhead, taxes, profit, sales commission, reserves, and etc., in addition to the full amount of the predictable claims. Self-paying these predictable claims results in direct savings of medical insurance premium loads.

Unpredictable costs such as shock claims or catastrophic losses, are justifiably insured through a excess-loss contract with an insurance carrier. Premiums are much lower for this type of coverage, so the insurance company loads are correspondingly lower.

For further information, please telephone or fax us today.
Telephone (440) 884-5454 FAX (440) 884-2351