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Four self-funding questions to ask clients and prospects

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Does a self-funding strategy make sense?

Facing double-digit premium increases despite years of plan design changes and wellness efforts, self-insuring is becoming more attractive to the small group market. As a result, more and more benefits advisors are recognizing the need to at least communicate these options to clients and prospects.

Often, simply communicating cutting-edge options can be a deal-winner, whether groups are ready to make the transition or not.

Of course, self-funding doesn't make sense for every group. Here are some key questions to ask to determine whether it makes sense to pursue this strategy.

Do you have insight into your claims history?

A steady population and consistent claims experience will provide more clarity as to whether this is a workable strategy.

What are your short-term and long-term goals for the health plan?

Is the group more concerned with minimizing costs on next year's renewal or creating sustainable savings in the long-term?

Can you withstand claims up to a stop-loss threshold?

A group's financial strength and cash flow is a key consideration.

What is the group's age, size and region?

Demographic criteria will factor into this decision.

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