Are fully insured plans the best option?
August, 25th, 2019
Why should you reconsider implementing a fully insured plan?
Many benefits providers have been promoting fully insured plans as the best option for the staffing industry. The rationale behind these plans that makes them tempting is that they cap your risk. However, there are a lot more limitations and questions about these plans that you may not be aware of.
Are you actually being limited by fully insured plans?
What you may not realize is that fully insured plans have many more limitations and complexities than self-funded options, and there is even an open question of whether they are viable and sustainable in the long run. Here are a few questions you may not have asked about fully insured plans:
- Is a fully insured MVP with no participation requirements viable and sustainable when examined by state DOI? Did you know that fully insured products are regulated by each state’s Department of Insurance, in addition to federal ACA requirements? This fact opens the door to all sorts of scenarios where states can be involved in making the final decision on whether a fully insured plan is viable and how and to whom it can be offered.
- Are you paying too much for fully insured plans? Fully insured plans are often more expensive than self-funded options. In fact, one provider’s recently announced fully insured, no minimum participation MV plan could potentially cost you two to three times more than the penalties it was designed to avoid!
- What happens to your excess claims money? If you have excess claims money on a fully insured plan, that money goes directly into the pockets of the insurer, whereas a self-funded plan puts that money back into your pockets to fund additional benefits.
- Does your fully insured plan limit your choice of additional benefits?When it comes to adding new benefits, many providers lump high-demand benefits like dental and life into their expensive indemnity plans. The result is that you’re forced to enroll in a plan that you may not want or need in order to access these benefits.
What is the best solution?
At Benefits in a Card, we believe that you should have the freedom to choose what additional benefits you want and that you should not be shackled to expensive fully insured indemnity plans to get them. That is why we believe a well-implemented MEC plan is almost always the best long-term solution for our clients. Why?
- The well-implemented MEC is almost always less expensive than fully insured plans.
- The MEC is much easier to implement and causes fewer headaches.
- It is a more attractive plan to employees because it satisfies the criteria of the law at the lowest cost possible (whereas indemnity plans do not satisfy these criteria).
- It allows you to use your excess claims money to fund the additional benefits you want—like dental and life.
It only needs to conform to federal ERISA laws (and not state DOI regulations), which makes it both viable and sustainable.
Do you want to implement a self-funded MEC strategy that works for you?
Or do you want to ask one of our representatives more about how you can improve and simplify your benefits offerings? We would be glad to talk and share with you how you can implement a winning benefits strategy.