Understanding Self-Funding Group Health Coverage

A self-funding group health plan is one option for an employer looking to cover their employees health benefits. This type of coverage can help avoid a major cost that come with large insurance brands and allows the owners to run it the way they want. There are many reasons to use self-funding group health coverage.

Maintaining Control

Instead of spending money on insurance premiums each month, the employer of a self-funded plan can save up money in an account specifically for the coverage. By not going through a third-party insurance agency, the employer maintains full control over the money and how it is used.

Lower Costs

Since money is not going into premiums, you can put it into things that matter more. As an employer, you can consider using a trust fund for the money you plan to save for the health needs of your employees. You still pay for it out of pocket when anyone files a claim.

No Taxes

Regulations that apply to normal plans are not relevant for self-funded plans. Self-funded coverage is also an excellent way to avoid paying more for taxes, as this kind of insurance is exempt from state insurance premium taxes. This can save you money and the time and effort it takes to file your taxes.

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