Save Money with Self-Funded Plans for Small Business
Updated: Feb 9
What if the health insurance you provide for your small businesses employees also had cost savings benefits for your Colorado based business?
Get the best small business health insurance Colorado plans for your business.
There is nothing quite like getting a quality product of service for less money. It feels good, like eating an In & Out Burger without waiting in line for an hour good. That is what a self-funded employee health insurance plan feels like for small business owners once they have switched over and experience the savings.
Self funded plans are common for large businesses. It allows large corporations to contract with major health insurance carriers and have the opportunity to get a portion, in their case a large portion, on their monthly premiums refunded to them at the end of the year. This allows major corporations to keep their health insurance premium costs down, especially in years when employee claims are low. I'll explain how in a moment.
This plan option is now available to small and medium sized businesses in Colorado.
This is how it works. You choose the plans you want to offer to your employees. You also choose what percentage (50% minimum) you want to pay for each employees premiums and if you would like to do the same for any of their family members.
Your monthly premiums are paid to your health insurance provider and your health insurance provider splits your monthly health insurance premiums into three "buckets."
The first bucket is for plan administration. The operating costs for the insurance company to manage your companies policies and claims.
The second bucket goes into an account that pays out employee claims as needed through out the year.
The third bucket goes to "stop loss" insurance which covers the cost of any claims that are not covered by the second bucket in any given year.
With traditional insurance plans through major carriers the entire premium goes to the carrier regardless of the number of claims in any given year. You are guaranteed to never see it again. Just ask Danny DeVito here...
With a self funded plan, in years when claims are low, you receive a refund from bucket number one, which lowers (sometimes significantly) your employees premium costs for that year. You can also choose to roll those dollars over into the next years premium costs and reduce the following years premium costs instead. Either way, you win... and the fire alarm won't go off.
In years when claims exceed those funds, the stop/loss insurance covers the additional costs making this solution 100% risk free with only additional cost savings benefits for your Colorado small business.
This is one of the best ways to insure that your small business health insurance plans are doing everything possible to help you stay in the black while keeping your employees happy, healthy and productive.
If you would like to learn more about self funded plans and get quotations from the top carriers for your business. Please reach out to us. Benefits 4Business is the premier small business health insurance Colorado agency.