Compensation packages offering ‘health benefits’ are coming with escalating price tags.  A growing number of school districts have discovered self-funded health plans add value in cost savings and more.

Self-funded health benefit plans are a health plan strategy where an employer pays member health claims directly to health providers, rather than paying premiums to a health insurance company to cover those claims.

School Districts that choose self-funded plans bypass the traditional health insurance model and instead work with a Third Party Administrator (TPA) in establishing, administering and managing the plan.

School districts considering self-funded health plans typically hire a TPA to provide the expertise in developing and administrating a customized plan. Working with a TPA, an employer is able to provide benefits, paying health providers directly only as needed and fixed administrative costs monthly to their TPA. This model represents significant cost savings to a company’s bottom line.

Self-funding represents a variety of benefits to consider:

  • Self-funded plans represent a competitive option offering substantial savings for employers.

  • Plans can be customized to meet specific organizational needs.

  • Self-funding is regulated on a federal level and often is exempt from state mandates.

  • Self-funded administration regulates plan reporting that provide insights and influences strategic decisions of employers.

  • Self-funded plans offer a greater sense of financial control for employers.

  • As regulations overseeing fully insured health plan requirements evolve, the advantage of customization attributes of self-funded health benefit plans increases.