Newsoftware technology is making it easier for employers to access andmanage health care networks and to pay claims directly forthemselves. (Photo: Shutterstock)
We are all familiar with the saying, “If you want something doneproperly, do it yourself.” But what if this saying was also true:“If you want something done profitably, do it yourself”?
When it comes to employee health insurance, most employers wouldprobably balk at the idea of pulling the function in-house. Today,of course, most U.S. employers farm out their benefit plans—payingan insurance provider that contracts a network of doctors andhospitals to care for employees and manage claims and otheradministrative minutiae. But a shift inregulatory compliance and recent technology advancements mean theindustry is now seeing a growing number of employers who arebenefiting significantly by, in some part, becoming their owninsurer.
The sickness pool
One of the challenges with the traditional approach is thatemployee health insurance is a statistical game of risk—and theodds may be stacked against many employers. In most cases when anemployer pays premiums to a large carrier for health insurance,they are swimming in a giant pool with many, many individuals withsignificant health conditions. The carrier is exposing itself torisk, and everyone ends up subsidizing the higher-risk employeepopulation.
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