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Why Self-Insure? What is Self-Insuring??
Self-insuring, also termed self-funding, allows an employer to realize substantial savings, control and flexibility of their group plan by removing the insurance company from all or part of the health and/or dental care.
Self-insured plans are subject to Canada Revenue Agency (CRA) regulations which can be found in IT Bulletin 339R2 and IT Bulletin 85R2 and fall under the category of a private health services plan (PHSP).
- Lower Cost of Administration: Employers find that administrative costs for a Self-insured program administered through a TPA (third party administrator) are significantly lower than those included in the premium by an insurance carrier.
- Elimination of Most Premium Tax: There is no premium tax on the self-insured claim expenditures. Premium tax is applied only to the stop-loss premium, which is a fraction of a fully insured premium.
- Profit Margin Eliminated: The profit margin and risk charge of Carrier insurance is eliminated for the bulk of the plan.
- Claims/Administration: Fast, efficient claims service. Claims are paid in three to four business days. Drug card and direct billing are available with most all vendors.
- Customer Service: The employee has access to a toll-free telephone number and a dedicated customer service team. Claims forms are available over the Internet.
- Cash Flow Benefit: The employer's cash flow is improved when money, formerly held by the Insurance carrier in the form of reserves, for unreported and pending claims, is freed for use by the employer.
- Reporting: Reports are available immediately upon request to employers and employees. The reports comply with privacy regulations.
- Control of Plan Design: The employer has complete flexibility in determining the appropriate plan design to meet the needs of the employer and employees. The employer can redesign its plan at any time that complies with CRA guidelines.
How it Works
- We examine the claims experience of your company with a long term view (usually three-years). Prior claims experience is an excellent indicator of your future financial commitments, and Stop Loss coverage will limit the risk for potential catastrophic claims. Poor experience may mean higher costs with traditional as well as self funding. The same benefits will still cost less in a self-funded plan as you are not paying for profit, risk charges, high trend factors and reserve assessment.
- Stop Loss Coverage is put in place to control the amount of risk to the employer. With an appropriate level of Stop Loss coverage, self-funded works for any firm and any size, even a group of one.
- A plan is designed to your specifications to meet your needs.
- Direct billing is provided at no cost.
- Pooled benefits, if any are put in place.
- Administration provided by DCM to meet your specific requirements. There are no set renewal dates dictated by an insurance company – you are in control. Fewer hours are spent dealing with your plan.
What's Best for You
- Only a one on one interview can determine if our services and the self funding model will be of benefit. One shoe does not fit all.
- In special cases, self funding may not be the answer. If this is the case, DCM is licensed to market traditional products through most all major Insurance companies in Canada. We may be able to design a hybrid model to better serve your needs.
book an appointment with one of our representatives and we will help you choose what is best for you.
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