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Is self-funding an
appropriate choice?

Self-funding vs.

Claim utilization

Risk management

The cost of health insurance is one of the largest line-item expenses in any company’s budget. Information is critical to helping you manage where your health care dollars are being spent. Useful data is necessary to make informed decisions regarding your benefit plan and as a tool for providing cost information that makes your employees better educated consumers of health care.

Fully-insured employers are more limited when it comes to obtaining reports that would be useful to make critical health care decisions. And if you’re a fully-insured employer, you may never get a utilization report. Most of the decisions are therefore based strictly on premiums paid. What would it be like to make other important business decisions without the supporting financial reports that help you make an intelligent choice?

Employers electing to self-fund health benefits need to have access to extensive claim utilization reports. As the plan sponsor, a self-funded employer literally owns their health care data. A standard reporting package is usually included in the administrative fee of the third party administrator. Additional, customized reports can usually be supplied for a nominal fee. These data reports are vital to you when making plan design and provider network evaluations and decisions. You should be reviewing these reports on a quarterly basis with your TPA.

The bottom line…as a self-funded employer, you have access to better reporting, which enables you to better analyze and make informed decisions about your health care spending.