Obamacare is causing employers to rethink the health insurance plans they offer workers, and QualChoice has a new product to take advantage of the flexibility companies are seeking.
“The Affordable Care Act took away a lot of the flexibility for insured product, so more and more employers are trying to maintain that flexibility, and so they’re willing to self-insure,” Mike Stock, CEO of QualChoice Holdings.
The plan is aimed at employers with as few as 10 workers. It allows them to self-fund a group health insurance plan and yet mitigate risk by letting employers buy stop-loss coverage to cover claims that exceed their estimate for the year.
Then, if at the end of the year claims were less than estimated, they’ll receive a refund, Stock said.
He said the self-funded insurance plan is aimed at employers who think their employees are healthier than the population used to determine the rates offered by traditional insurance products, the community rating.
“Self-insurance is not for every single employer,” Stock said. “They have to be willing to accept that risk. Depending on how risk-averse they are, some employers may be more comfortable just saying, ‘I want to pay my monthly premium and be done with it.’”
However, employers willing to accept some risk can save money with the QualChoice self-insurance plan, Stock said, if their workforce uses less health care than the community average.
The plan avoids some of the taxes created by the ACA and allows employers to customize the kinds of health expenses the self-insurance plan covers to meet the needs of its workers.
QualChoice will be training brokers and issuing quotes later this month in preparation for enrollment Jan. 1. Initially, the self-insurance plan for small employers will be offered only in Arkansas, but the company is working on rolling out the plan in seven or eight other states during the next six to 12 months, Stock said. Catholic Health Initiatives of Englewood, Colorado, bought QualChoice last year, and the nonprofit has been growing rapidly during the past four years, moving into new markets throughout the country.
Self-Funded Plans on Rise
Self-funded insurance plans have been used primarily by large organizations. The University of Arkansas System, for example, is self-insured.
But Stock said employers regardless of size increasingly are choosing to self-fund their health care plans. “More large employers, more mid-market employers and more small employers and the brokers who work with them — we’re just seeing a lot of demand for more flexibility,” he said.
A report released last week echoed Stock’s evaluation of the market. The third annual Guardian Workplace Benefits Study, issued by the Guardian Life Insurance Co. of America, said that self-insurance plans “are receiving increased attention due to the ACA. In 2015, only 7% of all employers surveyed report having a self-insured medical plan, but another 10% are giving this option some consideration.”
(GET THE LIST: This week’s list of the Largest Arkansas Insurance Agencies is available as a PDF or spreadsheet. Includes contact information, premiums written in most recent full year, number of employees, top executive, insurance lines, targeted industries and more.)
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