To self-fund or not to self-fund, that is the question. As thefully insured market continues to get slammedby unreasonably large rate increases, more employers are looking toself-funding as an opportunity to escape the chokehold ofever-increasing premiums. Watching the growing popularity ofself-funding is exciting, but I advise employers to proceed withcaution.

Self-insuring the health plan opens an employer to greatopportunity, but looking to self-funding as the ultimatedestination may bring great disappointment. Simply put,self-funding is a vehicle, not the destination. It is notthe solution; it is an avenue providing an organizationwith the opportunity to do some incredible things with its healthplan. Look at it this way: without a destination in mind or a roadmap to get there, an automobile is useless. However, if you have achosen destination with a clear set of directions to get there, anautomobile becomes an efficient vehicle allowing you to arrive atyour destination successfully.

In the case of self-funding, I hope your destination iscontrol—control of costs and control of how health care servicesare purchased inside your plan. With that, I have some good news.There are employers out there who have already created the roadmap. There are industry rebels who are already helping self-fundedemployers successfully arrive at their destination ahead ofeveryone else. If you research these employers and industry rebels,you will find they all share one thing in common: status quo has noplace in their world. Their road maps do not include shoppingcarriers, increasing deductibles or employee contributions. They donot focus on beating up vendors over administration fees and stoploss premiums.

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