by Katie Mercurio
April 30, 2024
As healthcare insurance costs continue to escalate, an increasing number of companies are contemplating the shift to self-funding their employee health insurance plans. Self-funding presents an attractive opportunity for businesses to mitigate healthcare expenses. By opting for self-funding, employers gain access to valuable data that aids in assessing plan performance and pinpointing areas for potential cost savings. While the idea of navigating the complexities of a self-funded plan can be daunting, advancements over the years have made the process of risk management and goal prioritization more manageable. Here are some things to consider when evaluating a claims payor, prescription vendor, and strategies for cost control in the self-funding realm:
· Third-Party Administrator (TPA) Partner – The TPA serves as the quarterback of your benefits plan, offering administrative services, claims management, and acting as the interface between the health plan and your employees. When assessing a potential TPA partner, inquire about the network, alignment with your business profile and carrier partners, commitment to innovative solutions, flexibility in plan design, and availability of managed care options (e.g., PPOs) for employees.
· Pharmacy Benefit Manager (PBM) – Navigating the pharmacy landscape can be intricate. When evaluating PBMs, inquire about their rebate-sharing practices, availability of innovative patient assistance programs, and service support.
· Cost Containment – This area presents ample flexibility for employers assuming liability for claims. It’s crucial to explore programs that enhance quality while reducing costs. Start by examining the vendors integrated with the TPA, considering recent successes with transparency tools aiding provider cost and quality assessment, virtual care alternatives, and participant education initiatives.
Transitioning to a self-funded plan may seem more dauting than a fully insured arrangement, but it doesn’t have to be with the right support. The extra effort in making the move can produce significant cost savings and a long-term solution.
