Advantages of Self Funding
*

The white area in the graph on the left represents the area of possible savings with the self-funded plan.

* Potential savings will be even greater in years when there are fewer claims than expected.
* Fixed cost is less with the self-funded plan.

Cash Flow Benefit - The clients cash flow would be improved when money formerly held by the fully insured carrier in the form of various reserves, is freed for use by the Corporation.

Control of Plan Design- The self funded employer has flexibility in the original plan design. The employer may also redesign the plan to control plan abuses as they are discovered.

Return on Investment for Reserves - Interest on reserves established by the client would remain under their control. These cash reserves remain as corporate assets.

Lower Cost of Operation - Employers frequently find that the administrative costs for a self funded program through a professional third party administrator (TPA) are lower than those being charged by fully insured carriers or an HMO

Carrier Profit Margin & Risk Charge Eliminated - The profit margin and risk charge of an insurance carrier are eliminated for the bulk of the plan.

Effective Processing - The TPA's success depends upon providing accurate, controlled claim processing for each employer.

Cost Utilization Controls - GISC offers a second surgical opinion program, hospital bill audits, large case management, access to preferred provider networks (PPO), and other programs through numerous sources.

Savings from Premium Tax - A premium tax is charged on a fully insured plan based on the total premium paid. With a self funded plan, the premium tax is based on a premium drastically lower than the fully insured option.

Mandatory Benefits Avoided - Because the self funded program is subject to ERISA, state mandated benefits can be avoided. The self funded program is more flexible because it is governed by the federal laws as opposed to the individual states.

Administration Tailored to the Employers Needs- The client will have the benefit of the many other services that GISC has to offer such as COBRA Administration, Flexible Spending Administration, On-site Account Executive, CRT hookup, custom reporting, singular dedicated claims analyst and Employee Assistance Programs.

Flexibility in Choice - With a self funded option there are no "gatekeepers". The employees of the group will have the freedom to choose any doctor or any hospital that they wish to utilize. This freedom will allow the members to have access to the best providers specializing in their particular medical concern.

Health-Care Value Management - With a self funded program through GISC, the client will have access to the largest PPO network in New England. The most prestigious hospitals and centers of excellence are members of the HCVM network.

Reporting - GISC offers 13 standard reports. These reports illustrate where the claim dollars are being spent. The detailed claim experience can be used to lower the cost of the plan for future years.

Flexibility in Funding - The client will have numerous funding options. Many of GISC's clients enjoy the cash flow benefit of having to fund only the exact dollar amount of those eligible claims processed for any given time period.

Caps and Exposure - GISC offers many options that will cap the clients exposure (Specific Advancements, Monthly Aggregate Accommodation, Terminal Liability).

Cost Effective Plan - Theoretically, a self-funded plan will be more cost-effective than any fully insured plan because many expenses associated with a fully insured plan are eliminated and gains due to better than expected claims experience would belong to the client. In addition, if the client has good experience, they will not have to subsidize those groups with bad experience.


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