Self Funded Benefit Plans: The process involves creating a benefit plan (called a Plan Document) for employees that is regulated by ERISA and the Department of Labor. The employer is required to fund the costs associated with the plan from current assets as they are incurred. HSCG Kentucky will operate the plan. The employer has complete flexibility in plan design. All benefit plans are designed to meet the specific needs of the employer. There are no requirements to include state mandated benefits. While the employer assumes the risk of expected claims, HSCG Kentucky procures reinsurance to protect the plan against unpredictable losses. The employer has the option to purchase stop loss coverage to protect the employer’s assets against catastrophic losses.

Lowers Overall Healthcare Costs: There is a lower cost of administrative operation overhead. Typical administrative costs average from 3% to 10%. Insured carriers typically range from 8% to 20%+. Another benefit is Elimination of carrier profit margins. Most carriers are looking for a profit margin of 4% – 7%. In the self funded environment these dollars are retained by the employer. The employer in a self-funded benefit plan also removes the Retention of reserve or risk funds that is out of their budgetary control. Insured carriers collect premiums before any claims are paid (in advance). They retain any reserves and earn interest or investment income on those reserves. When self-funded, the employer retains these funds until claims are presented for payment.