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Considering self-insuring?
Considering self-insuring your employee group benefits plan? We can help! Maximum Benefit is our go-to provider for companies that want to self-insure their employee benefit plans (ex. dental).
What is self-insuring?
Self-Insuring is a great way to reduce the cost of a group benefits plan and can work well for organizations that expect a predictable claims experience.
To the employer and employees, a self-insured plan functions exactly the same as an insured plan with only one big difference: The employer is only paying for “claims” that have actually been incurred by the employee group plus a small administration fee that is paid to a third party administrator for adjudicating the claims. The potential cost savings can be substantial!
How do you know whether self-insured or Insured is best for your organization?
When a company offers group insurance benefits to their employees, it’s most common to take the “insured” approach. However, in some cases, the self-insured path can actually be more beneficial.
Here are some more reasons why this employee benefits plan may be right for you:
Insured Approach
- The Insured Approach minimizes the risk to the employer and stabilizes the overall cost of the plan by spreading the claims out over a large “pool” of participants.
- This is particularly important for Basic Life Insurance and Long-Term Disability benefits where the potential for a catastrophic loss is very great.
Self-Insurance
- The Self-Insured approach is often less expensive because the cost is contained to only the total amount of annual claims made.
- If your company primarily requires Dental benefits, Extended Health and Weekly Indemnity benefits, you’re likely a good candidate for this approach. However, if you require Life Insurance and Long-Term disability, this approach is not likely going to save you money.
Would self-insurance save your company money?
Insurance becomes costly for an employer when inflation, expenses, and trend factors are combined to drive up the costs of benefits. For example, if an annual inflation rate of 12% is combined with an insurance company’s expense margin of 35%, claims for the year would have to be less than 53% of the total premium paid to ensure that the rates would not increase in the following year. In other words:
So, would self-insurance save your company money?
Contact us today to learn more about the Maximum Benefit program and for a no-cost analysis of your employee benefits plan.
We're passionate about making a difference in the communities we serve.
Since 1991, Ranger West has prided itself on providing affordable group benefit plans to small to medium-sized businesses across the Tri-cities and Greater Vancouver areas. We work with all the Major Group Insurance providers in Canada to make sure you’re getting the best value/options available.
