Due to skyrocketing health insurance costs, employers are often hesitant to accept the annual rate increase from a traditional fully-insured carrier. Many employers look to Self-Funding as an alternative approach to gain control over rising healthcare costs.
Under a self-funded plan, the employer decides on a plan of benefits with the assistance of their agent/broker and a Third Party Administrator (TPA), such as Preferred Benefit Administrators. The self-funded plan is often very similar to the plan provided on an insured basis, however, the employer can improve cash flow and maintain better cost and utilization control by tailoring benefits to meet the group's unique health plan needs.
Reinsurance coverage, also known as Stop Loss insurance, is put in place to protect the plan against excessive losses.
A Plan Document & Summary Plan Description is prepared, containing all of the provisions of the plan, including eligibility, coverage, and termination provisions. Preferred Benefit Administrators will prepare all necessary Plan Documents, identification cards and other forms and materials necessary to operate the plan. Preferred then administers the plan by: