Choosing between self-funding or insurance will impact a multiemployer benefit fund's finances, reserves and contribution requirements.
Some funds with significant levels of cash reserves can reduce costs by self-funding their health plans or assuming more risk. Before doing this, a plan must carefully consider the ramifications and protect itself against ordinary or catastrophic risks.
Segal can help trustees determine if self-insuring or other cost-saving funding arrangements are right for their fund. We can also help funds that are already self-insured evaluate whether self-insuring is still the best choice.
Self-insured funds can protect themselves against large claims or fluctuations in claims by purchasing stop-loss insurance, which sets a limit on how much the fund will have to pay for individual or aggregate claims. Segal can help trustees with:
- Evaluating whether stop-loss insurance is the right option for the fund
- Determining the level of stop-loss insurance and claims reporting contract basis that is appropriate
- Evaluating whether the fund needs specific or aggregate insurance, or both
- Deciding whether to include prescription benefits in the policy
- Developing an RFP and preparing documentation
- Negotiating policy provisions with the insurer
- Addressing coverage gaps
- Monitoring stop-loss market conditions to take advantage of increased competition
- Negotiating renewals
- Settling claims disputes