Alternate Funding Solutions

Level Funding

Best for Employers with less than 150 employee lives

Advantages

  • Per employee, per month funding is easy to budget and easy to understand
  • Specific and aggregate stop-loss coverage limits your plan’s exposure
  • Monthly and quarterly reports provide full transparency on plan costs and performance
  • 100% of the unused claims fund will be refunded at the end of the run-out period

Disadvantages

  • Not good for poor performing companies
  • The administrative fees may cut into the savings you hope to gain
  • Some programs limit the amount of refund you can earn in a good year
Small Risk
Little Reward

Employee Benefit Cooperatives/Captives

Best for Employers with 50 – 300 employee lives

Employee Benefit

Cooperatives/

Captives

Best for Employers with 50 – 300 employee lives

Advantages

  • Stability of larger numbers
  • Transparency in data and costs
  • Accountability to participate in wellness and risk management programs
  • Rewarded financially in good claim years
  • Swim in a healthier pool

Disadvantages

  • Members are expected to “play nice in the sandbox”
  • Member engagement – calls and meetings
  • Could be adversely impacted by the pool
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Medium Risk
Medium Reward

Self-Funding

Best for Employers with 250+ employee lives

Advantages

  • Plan design flexibility
  • Benefits from good performance
  • Reward for investments into health, wellbeing and risk management
  • Access to claims data and transparency in costs to your plan

Disadvantages

  • Not always good for small to mid-size employers
  • Fluctuation in claims can be a budget challenge
  • Not good for employers with an unhealthy population
Highest Risk
Greatest Reward

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