Why Self-Fund?

Self-Funding Basics

Self-funding provides the ability to design a custom health benefits plan around specific needs or goals.

Unlike traditional health plans with a fixed premium, self-funding is an arrangement where the employer assumes the financial risk but also the rewards potential of providing healthcare benefits.

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Primary Components

There are administrative costs, stop-loss premiums, and any other set fees charged per employee which are referred to as “fixed costs” and are billed monthly based on plan enrollment. The employer also pays the claim costs incurred by the members, which vary from month to month based on plan utilization.

Reimbursements are made if the claims costs exceed the deductible and/or aggregate attachment point as outlined in the policy. The total annual self-funded plan costs are the fixed costs plus the claims expense less any stop-loss reimbursements.

How It Works

A business that wishes to self-fund will partner with a third-party administrator (TPA) like ACS. The TPA will work with the employer and provide benefits, process claims, and receive robust reporting with insightful data to better manage the risks and future costs of healthcare.

Many employers will also elect to partner with a stop-loss carrier for additional protection against catastrophic claims.

1 - bills go to tpa / 2 - third pary administrator: provider payments, customer service, & claims processing / 3 - Employer authorizes TPA to pay claims / Employer TPA processes claims

Employer Group Partners with ACS

Provider -> ACS Processes Claims, Pays Providers, Provides Customer Support -> Employer

Fact vs. Fiction

Myth #1:

Most Self-Funded Plans Are Totally Self-Funded


Most employers who choose to self-fund their health plan really “partially” self-fund, meaning they purchase stop-loss insurance to cover catastrophic claims that exceed actuarially anticipated levels

Myth #2:

Only Very Large Companies Can Afford to Self-Fund


Most of the recent growth in self-funding has been among smaller companies, some with as few as 25 employees. The economic advantages of self-funding do not change with the number of employees enrolled in the plan.

Myth #3:

Self-Funded Plans Are Often Rejected by Healthcare Providers


Today, some form of self-funding covers two-thirds of employees covered under an employer-sponsored health plan. Healthcare providers see patients that are covered by self-funded plans every day.

Myth #4:

Self-funding Is Too Much Work for the Employer


An employer is required to do little more day-to-day administrative work with an ACS-managed self-funded health plan than with a fully insured plan. We handle the day-to-day claims processing and virtually all customer service inquiries.

Myth #5:

Self-funded plans are Not Subject to Regulation


Self-funded plans are subject to the Employee Retirement Income Security Act (ERISA), which requires each benefit transaction to follow the specific coverage provisions. Additionally, HIPPA privacy, security, and portability provisions also apply to self-funded plans.

Benefits of Self-Funding

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Greater Flexibility

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Cost Management


Information Management

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Increased Financial Control

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Access to Plan Information

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Potential for Lower Costs

Self-Funding with ACS

ACS Benefit Services is in the people business. First and foremost, we want to get to know you. We want to learn more about your business, specific wants, and unique needs. This allows us to create a customized health plan with innovation, savings, and support for long-term results.

Want to learn more about self-funded health plans and your options with ACS?

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Wes Jones

Vice-President, Sales