What are the advantages of a Self-Funded Plan?
There are distinct advantages that apply to all self-funded plans. Self-funded plans do not pay premium tax. Self-funded plans keep earnings on their claim reserves. Self-funded plans have access to the pharmaceutical plan rebates that are normally kept by their insurance companies. Self-funded plan sponsors do not pre-pay their claim costs. Self-funded plans have a choice of efficient administrators, like Maxon, who charge a lot less money for the work they do than insurance companies. These advantages alone make self-funding a very attractive alternative to insuring your medical plan. For commercial plans there is one other advantage. For commercial plans the greatest advantage is their ability to customize their benefits because they do not have to comply with state benefit mandates, which are a large part of the escalating cost of health care today.
