Employee benefits have been around since the early 1940’s when employers were trying to obtain the best employees in a post World War II era. After the war, it became more frequent to find companies offering benefits in a highly competitive environment. Today, most employers still consider a group benefit package a standard and essential part of full time employment. Unfortunately, the challenge for many employers is swallowing the big bite of rising expense for offering this valuable perk. Inflation has definitely not kept up with the rising cost of employee benefits. In fact, employers can expect to pay around $9,500 per employee this year! This is a scary continuation from prior years when many premiums have increased in upwards of 80% over the past decade. That is three times as fast as wages and inflation. So what options do employers have?
One popular option has historically been self-funding, although this option has primarily been an option for mid to large sized employers it has grown in popularity and feasibility for smaller groups due to the number of groups banding together to provide bulk buying power to reduce some of the costs and risks of self-funding.
Self-funding gives the employer the chance to reduce costs by paying their own claims instead of sending their premiums to an insurance company that will hold those funds in reserve. Self-funding plans allow employers to avoid certain ACA requirements such as taxes, fees and administrative costs.
Self-funding plans allow for greater flexibility for employers to set rates based on claims history and in the event that a surplus exists, the employer can accumulate savings and earn interest to offset future expense.
If you would like to learn more about Self-Funding and other options to offset your rising benefits costs, please contact us at Beimdiek Insurance. Our unique process allows us to discover the best possible solution for your company. Give us a call at 417-358-4007 or email me at firstname.lastname@example.org.