Self-funded plans

Self-funded plans, sometimes called administrative services only (ASO) plans, function much like their fully insured counterparts. However, they come with an increased risk for employers, tend to have a high degree of administrative complexity, and offer little in terms of predictable cost savings. In addition, they:

Differ from traditional plans in risk tolerance and funding, plan design flexibility, and overall administration.

Can be customized and offer employers more choice over plan designs, carriers, and third-party administrators (TPAs).

Shift the financial risk from the carrier to the employer, allowing for reinsurance via individual and aggregate stop-loss arrangements.

ICHRAs

An ICHRA is a type of employer-provided health benefit plan that allows employees to choose their own health insurance coverage and to receive tax-advantaged funds from their employer for a portion of their plan's premiums and qualified medical expenses. With an ICHRA, choice is the central theme.

Employers enjoy being able to choose exactly how much they want to contribute, tax-free, to employees' health coverage.
At the same time, employees have an abundance of choice in their health plans like never before; they can shop around for the individual health plan that best fits their needs instead of settling for one or two options selected by their employer.

5 reasons ICHRAs could be a an alternative to self-funding

1. Predictable pricing

Moving from fully insured to self-funded doesn't eliminate the claims risk for a company; it simply shifts that risk to the employer, making it a yearly gamble. An ICHRA, on the other hand, disperses the risk across the much larger individual market, so pricing remains much more stable.

Instant Insights /

5 reasons ICHRAs could be a an alternative to self-funding

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