A Self-Funded Health Plan requires the employer to become the insurer. Most often, employers will partner with a PPO to provide services for the plan. A third party (a TPA) is engaged to handle claims and processing. Because self-insured employers run the risk of large catastrophic claims, they will purchase stop-loss insurance to protect them in such an event. Even with the additional expense of stop-loss insurance, employers benefit greatly from a significant savings, increased cash flow, tax advantages and more control over the benefits the plan offers.
With healthcare reform and the rise in healthcare costs and premiums, employers are finding self-insured funding to be a favorable option in saving thousands in premiums along with many other benefits. Today, self-insured plans are considered to be good options for both small and large employers.
Gap insurance is intended to help cover the high out-of-pocket expenses normally associated with a low premium, high deductible health plan. When you purchase a GAP policy, the additional benefits help to cover out-of-pocket expenses related to coinsurance, co-pays and deductibles for inpatient and outpatient services. For example, if you have a $5,000 deductible on your major medical plan, gap coverage will pay up to $4,000 of that deductible.
Because the premiums are very reasonable on GAP policies, most employers find that purchasing the extra coverage along with a high deductible, low premium plan is much less than one stand alone lower deductible, major medical policy.
Anderson & Kime Employee Benefits, Inc.
1-800-598-4019 ext. 112