• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
New City Logo

New City Insurance

Employee Benefits & HR Consulting Firm

  • Benefits Consulting
    • 401k & Retirement
    • Employee Benefits Benchmarking
    • Executive Benefits
    • Group Health Insurance
  • HR Compliance & Technology
    • Benefits Administration Technology
    • Employee Benefits Compliance
    • HR & Payroll Integration
    • HR Support
  • Our Process
  • Industries
    • Aerospace Industry
    • Biotech Industry
    • Engineering Industry
    • IT Industry
    • Manufacturing Industry
    • Gas & Oil Industry
  • Request Consultation
  • Industries
    • Aerospace Industry
    • Biotech Industry
    • Engineering Industry
    • IT Industry
    • Manufacturing Industry
    • Gas & Oil Industry
  • About
  • Blog
  • Contact
  • Client Portal
  • 888.210.2759
  • Request Consultation

Top 5 Reasons Why Employers Are Moving Towards Self-Funding Insurance Models

December 20, 2021, by New City Insurance

graph showing the high cost of health care for self fundingHealth care costs are continuing to rise and many businesses are looking for ways to control costs without diminishing health care access for their employees. Although there is no one-size-fits-all approach to obtaining affordable health care, many employers are finding self-funding insurance models to be a more cost-effective strategy compared to traditional, fully insured plans.

Companies that choose to partner with their insurance companies can enjoy more flexibility, long-term savings, and budget-friendly caps that help control costs. Learn more about self-funded insurance and why so many employers are making the move towards self-funded insurance models.

Why Businesses Choose Self-Funding Insurance

There are several reasons why many employers are moving from fully funded health insurance to self-funded plans.

1. More Flexibility

Self-funded health insurance plans provide more flexibility to employers. These plans are not subject to certain state requirements and at the end of the plan year, the business can get some money back. Self-funding also enables companies to better meet the unique needs of their workforce and control the terms of the plan to ensure that employees are satisfied with their benefits.

meeting in office about self funding insuranceEmployers also have the opportunity to work with a third party administrator (TPA) to customize their benefits. A TPA is a type of entity that processes or adjudicates claims for employee benefits plans.

2. Cost Savings

Every business wants to save money and changing health care plans is one way to achieve this goal. When self-funded employers partner with an experienced third party administrator (TPA), they can save money on their health plans for each person who enrolls.

TPAs work directly with businesses to manage health plans that meet the unique specifications of the employer instead of an insurance carrier’s policy. Employers can also save through individualized plan management that eliminates gimmicky “discounts” and other types of marketing schemes.

3. Increased Cash Flow

One of the biggest reasons that employers are making the move towards self-funded insurance models is to improve their cash flow. Traditional health insurance plans require employers to prepay for any potential claims that may arise through monthly premiums.

However, a self-funded health insurance plan allows for better control over cash flow as employers are only required to pay claims when the services are actually rendered. Greater control over cash flow can often lead to extra savings for businesses.

4. Reduced Premiums

insurance premuim concept calculating concept with self fundingEmployers that choose self-funded health insurance do not have to pay full state premium taxes. These taxes typically range from 2 to 3 percent of the monthly premium cost and can drop significantly with self-funded plans. Insurance companies are typically charged state taxes on collected premiums, but with self-funding, premiums are only collected with excess loss coverage.

As the cost is just a fraction of the standard insured premium, employers pay significantly less when they choose self-funded plans. Businesses can also save in other ways, such as by eliminating risk and retention fees.

5. Customized Plans

What makes self-funded health plans truly unique is that businesses have the opportunity to customize them to meet their needs and the needs of their employees. Employers have the option to contact providers directly, contract directly with provider networks, negotiate claims, and select pharmacy benefit managers that are best suited to meet the unique health care needs of employees.

Schedule A Consultation About Self Funding Insurance New City Insurance

Although self-funded insurance models have many benefits, they are not right for every business. Since self-insured employers must assume the risk of paying employee health care claims, they must have the financial resources to meet these ongoing obligations, which can sometimes be unpredictable. Companies with poor cash flow may find that self-funding is not a suitable option for their organization.

Working with an experienced employee benefits consulting firm can help ensure that employers make the best decision for their business and workforce. To learn more about why employers are moving towards self-funded insurance models or to schedule a consultation with an employee benefits consultant, contact New City Insurance.

Have Additional Questions?
Call Today: 888.210.2759
Request a Consultation

Filed Under: Self Funding

Primary Sidebar

Have A Question?

Ask a question or request a consultation, and we will respond to you in a timely manner.
  • This field is for validation purposes and should be left unchanged.

Footer

New City Logo
Corporate Headquarters 600 B St STE 300, San Diego, CA 92101
888.210.2759
info@newcityinsurance.com

Insurance Products

  • Commercial Insurance
  • Pay-As-You-Go Workers Comp
  • Group Health Insurance
  • Workers Comp
  • Self Funding
  • Minimum Essential Coverage

Benefits Consulting

  • 401k & Retirement
  • Employee Benefits Benchmarking
  • Executive Benefits
  • Group Health Insurance
  • PEOs
  • Wellness Plans

HR & Technology

  • Benefits Technology
  • Benefits Compliance
  • Growth Strategy
  • HR & Payroll Integration
  • HR Support

Industries

  • Aerospace
  • Biotech
  • Engineering
  • IT
  • Manufacturing
  • Gas & Oil
Google Rating
5.0
New City Insurance
New City Insurance
5.0
Carol Zhang
Carol Zhang
04:29 06 Mar 22
As a rapidly expanding national media organization, the employee benefits strategy and administration that New City has provided us during our growth has been invaluable. They have been proactive about informing us of the different benefit strategies available to us as we grow as well as managing the additional compliance laws and reporting requirements at each stage of our growth.
Claudia Villalobos
Claudia Villalobos
20:14 03 Mar 22
New City Insurance made navigating through all the health insurances super EASY. Their documents are highly informative, professional, and easy to work with. Thank you for making the process of choosing a health plan so simple. You guys are THE BEST!
Philippe Salas
Philippe Salas
17:02 22 Feb 22
I never expected to have a good time talking to an insurance salesman, but let me tell you Brendan was quite the treat. He was very helpful explaining the options and has a wonderful sense of humor. I hope to speak with him every time I call.
Jennifer Polito
Jennifer Polito
17:15 09 Feb 22
Super easy enrollment process. Fast and friendly customer service. If you are looking for an insurance company that is there for you every step of the way I highly recommend New City Insurance.
Rocky Salas
Rocky Salas
23:46 07 Jan 22
So friendly, I hope to speak to him again in all my future insurance needs.
Rocky Salas
Rocky Salas
23:38 07 Jan 22
So friendly and soft spoken. I hope to speak to him again in all my future insurance needs.
Jose Brena
Jose Brena
13:20 06 Jan 22
Eric Calciano has been extremely helpful in finding and selecting the right insurance coverage for our company. With many options out there Eric assisted us on getting a low cost provider saving more than 20% than from our competitors and providing excellent coverage for our employees.
Anastasia Beaverhousen
Anastasia Beaverhousen
17:05 28 Dec 21
Signing up for insurance was quick and easy. Felicity Sundsboe
SFCC
SFCC
22:08 29 Nov 21
Jeff Stoltey and his team provide excellent customer service. Jeff has always provided my company SFCC with straightforward options. I went to a larger insurance company only to RUN BACK to Jeff at New City Insurance. I recommend them to anyone needing insurance without hesitation.
Kevin Luby
Kevin Luby
19:13 22 Oct 21
Quick, easy & informative. We were able to secure quality insurance for our small business on a tight deadline. Thanks for the help New City.
Theresa Ruybol
Theresa Ruybol
19:30 01 Jul 21
Eric was so great with us. He was very patient and kind as we are a newer smaller organization who is growing rapidly. With that said, we had made our inquiry, he had great rapid response and mostly had to wait on me. Any request that we made and/or questions we had, he was great answering and helping us understand. Then when we were ready for all documents and to move forward, Brendan helped with getting that together and the two of them worked their magic on New City's end to notify me of what was needed, assist me in that process and confirming that all was complete and approved for the coverage. I just want to say thank you all again so much, as insurance has always been confusing to me, and you all made that process go a lot smoother.Thank you
Andrea Ordendorff
Andrea Ordendorff
21:06 07 May 21
I've been working with both Clayton and Brendan for well over a year. As the purchase of our dental practice was delayed well over 14 months they both patiently supported me and continued to make themselves available. When we were officially ready to sign up they made the whole process seamless and super easy. This team is highly knowledgeable, professional, supportive, and efficient! I can't thank them enough for everything they've done.
T W
T W
22:32 30 Aug 20
I love New City Insurance. I never had a good experience dealing with insurance brokers until I started working with Brendan. He’s awesome! He is patient with me and takes the time to answer all my questions. I’m very grateful for all his help and hard work!
Mary Jane Deyette
Mary Jane Deyette
00:57 11 May 20
Jeff Stoltey is so awesome...even thru my company had only two employees, he took the time each year to research and find the best plan for us. The only reason I am leaving New City Insurance is because we no longer have any employees. Thank you Jeff
Alma Ortiz
Alma Ortiz
22:25 23 Feb 20
Brendan was awesome! I couldn't figure out how to pick my plan and he returned my call on a weekend to help me. Outstansing service!
jessica kavanagh
jessica kavanagh
19:53 13 Feb 20
Brendan was so helpful I definitely recommend him if you’re in need of good help and getting it done promptly. Thankyou so much again.
Tricia DeYoung
Tricia DeYoung
19:49 13 Feb 20
I was very thankful I inquired about this info. with Brendan. He was very helpful so I understand the benefits available much better now. Thank you Brendan.
B Bayer
B Bayer
17:43 24 Sep 19
NCI handled almost everything from start to finish. Clayton and Brendan made the plans easy to understand and walked me through the application process. They got me my ID numbers before my cards arrived so that I could keep an appointment I had already scheduled. My last broker wouldn't have done that. 5 stars!
Jessica Lehr
Jessica Lehr
03:36 07 Jun 19
Our staff was interested in a health plan, but we didn't know how beneficial a solid employee benefits package would be for our business to expand. We'd lose prospective employees because they had more options for their medical insurance which was sometimes more valuable than more pay. The New City team was amazing and gave us as many affordable options as possible so that everyone had their needs met.
Mike McClay
Mike McClay
19:36 03 May 19
My employer uses New City as their insurance broker, and I'm always amazed when I call in for assistance by how knowledgeable and attentive their staff is with my requests. Their online benefits platform makes selecting insurance plans pretty darn easy. I would highly recommend their services.
Next Reviews Write a review
powered by Google
Privacy Policy | Terms Of Use