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Inside Administrators
Integra
BENEFITS OF SELF-INSURANCE
1. Elimination of Most Premium Tax: There is no premium tax for the self-insured claim fund. Premium tax is applied only to the Stop Loss premium, which is significantly less than a fully insured plan.
2. Lower Cost of Operation: Employers frequently find that administrative costs for a self-insured program administered through a TPA are lower than those charged by a full-service insurance carrier.
3. Carrier Profit Margin and Risk Charge Eliminated: The profit margin and risk charge of an insurance carrier are eliminated for the bulk of the plan.
4. Effective Claim Management: TPAs are evaluated on their ability to provide fast, efficient claims service as well as appropriate management of claims to reduce the employer's cost.
5. Managed Care Services: The TPA may offer a variety of managed care services including utilization review, large case management, hospital bill audits, access to preferred provider organizations and centers of excellence, and other programs through a variety of sources rather than the employer being required to use only the insurance company's in-house service.
6. Cash Flow Benefit: The employer's cash flow may be improved when money formerly held by the insurance carrier in the form of various reserves, such as unreported claims and pending claims, is freed for use by the employer.
7. Return on Investment for Reserves: Interest on reserves established by the employer remains under the employer's control.
8. Control of Plan Design: The employer has complete flexibility in determining the appropriate plan design to meet the needs of the employees. The employer can redesign the plan to eliminate plan abuses if they are encountered.
9. Mandatory Benefits are Avoided: State regulations mandating costly benefits are avoided because self- funding is regulated by federal legislation.
10. Administration Tailored to the Employer's Needs: The employer usually has a choice of TPAs, each of whom is interested in providing the employer with flexible services to meet the employer's needs.
11. Risk Management Effectiveness Through Stop Loss Insurance: The employer may choose the amount of risk to retain and the amount to be covered by Stop Loss coverage.