Split Funding

Many employers pay an insurance carrier monthly premium for their group health insurance plan. The monthly premium covers all cost associated with the plan such as claims, administration and reserves.

 

While some employers find this traditional approach convenient, other employers find it limiting with no flexibility. The split funding plan offers businesses an alternative to the traditional approach with the added benefit of returning money to the employer in years with lower than expected claims cost.

 

THE CONCEPT

The split funding plan combines the best features of a traditional fully insured plan with a high deductible plan that is partially self funded. The premium savings from the fully insured plan funds a portion of the high deductible making it possible for the employee to maintain their current deductible level.

 

Unlike a traditional health plan (all premiums are paid to the insurance carrier) the split funding plan allows the employer to maintain their cash reserves.

 

THE ADVANTAGES

• Flexibility of benefit plan design

• Renewal rates are based on much lower fully insured premiums

• Potential cash reserves maintained by employer

• Superior client and employee service

• Monthly reporting