Unbundling your group health plan can unlock significant savings and flexibility for your business. In this post, we’ll explore the top reasons to unbundle, highlighting how it allows you to access high-quality providers, reduce costs, and take control of your healthcare strategy.
1. IMPROVED CASH FLOW
You pay claims as they come due rather than funding them through advance premium payments as is done under a standard insurance policy.
You also maintain control over the health plan reserves, enabling maximization of interest income – income that would be otherwise generated by an insurance carrier through the investment of premium dollars.
Finally, interest earned on reserves, which are established by you for the payment of claims, remain under your control.
2. LOWER COSTS AND GREATER STABILITY
You avoid the costs of claim reserves, profit margin, risk charges, and a contingency margin. These reserves and retention charges can range from 10% to 30%.
You also reduce operating costs because the administrative costs through an independent administrator are fully transparent and lower than those charged by an insurance carrier.
And finally, for employers under 100, you are not subject to “community rated” premiums.
3. ELIMINATION OF TAXES
The Health Insurance Tax adds 2.5% to 3.0% to traditional health insurance costs—cost that are not applicable to self-funded group health plans.
Additionally, you are not subject to state health insurance premium taxes, which are 2% to 3% of the fully insured premium's dollar value.
These tax savings alone can result in a 4.5% to 6.0% reduction in costs.
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If your health insurance is not working for you — then it is working against you and undermining your company’s financial strength and viability. Fully-insured plans “work against” employers who are aggressively managing all their other costs and expenses. To learn how the MAGIC Method of Unbundling can help you keep more of your money to fund more of your company’s goals, as well as return more profit to your bottom line call (844) 800-MAGIC.
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