1275 North Highway 47
The number-one concern for small business owners is the cost of health care. So, Alternate Funding plans were built with your small business in mind. They're intended to help you have money—and help your employees get more out of their plans, too.
Did you know that 63 percent of small business employees spend less than $1,500 a year on health care? It's often for things like ear infections, broken bones or routine checkups. But since those employees don't meet their deductibles, they end up covering most of their medical costs out of their own pocket..
Alternate Funding plans are self-funded health plans designed specifically for small businesses. It includes three parts:
With traditional plans, a small business pays a fixed premium to the insurance company, and then the insurance company pays the health care claims as well as the administrative costs, sales commissions and taxes.
If the actual health care claims are higher than expected, the insurance company covers them. But if the claims are lower than expected, the insurance company keeps the difference. This means your company doesn't get anything back if your employees have lower-than-expected claims.
With Alternate Funding, if the covered health care claims are lower than expected, your plan shares the savings with money back at the end of the year. And if the covered claims are higher than expected, your stop-loss insurance policy covers them.
Here are a few additional benefits of an Alternate Funding self-funded plan:
Your company's monthly payments include the estimated health care claims plus fixed-cost items (administrative fees and stoploss insurance premium). This is called your plan's “maximum liability,” which means you won't get stuck at the end of the year with any unexpected costs.
Part of your monthly payments will go into an account that pays for your covered employees' eligible claims. At the end of the year, the monthly claims funding payments will be compared with the actual claims costs. In the best-case scenario, if actual claims costs for the year are less than what was estimated, your plan has a surplus.
After plan reconciliation, a percentage of any surplus is sent back to your plan to use for the following year, and a percentage is kept as a deferred service fee. (percentage varies by carrier)
In the worst-case scenario, the actual claims would be higher than expected. But because your plan would have already paid the maximum liability, you won't pay more for covered claims at the end of the plan year.
Your plan is protected by the stop-loss insurance that is already built into your monthly payments.
Of course, each year could be somewhere in between. But in any case, many small businesses could save with an Alternative Funding plan.