According to SELFFundingSuccess.com the answer to the “viable and financially appropriate” aspect is why so much emphasis is placed on prudent consideration, planning and selection of a TPA. Self-funding allows the savings that result from paying actual claim costs vs. fixed costs to stay with and benefit the plan instead of going to a traditional carrier. It all comes back to the “prudent” factor. The larger risk-spread of a fully insured plan might make more sense if an employer has an unreliable cash flow, weak finances or permanent medical conditions within the plan that are impractical to cover. TPAs will be candid about a company’s viability for self-funding because they don’t want to see a plan or employer struggle.
To learn more about Self-Funding and to see if it is a viable option for your company contact GPI at 516.804.3383 or visit our website