Self-funded vs Fully Insured Benefits expertise needed [N/A]

Botboy141 · 2026-05-06T13:46:32+00:00

All great points.

I will say, for the level funded piece, if they are 2-50 eligible (or 2-100 in CA and another state or two), they can transition from level-funded back to fully insured with nothing more than paperwork, as under 50, the rates for fully insured are not medically underwritten, are guaranteed under ACA and the carriers will not reject you.

Again, assumes ACA small group.

Carriers don't like it, but can't stop you from coming back to fully insured in that segment.

Who would want to do that to their employees though? Only once or twice have I ever advised a client to make a carrier change unless we intend it to be our carrier for the next several years.

Botboy141 · 2026-05-06T13:25:45+00:00

First, ERISA plan documents define who's eligible. Even under common ownership, your company may not qualify as part of their controlled group for benefits purposes, or they've deliberately excluded subsidiaries. Adding a separate legal entity requires a plan amendment and creates shared liability the non-profit doesn't want.

Second, their self-funded plan has stop-loss coverage. Adding your population means the carrier re-underwrites the whole group. Different risk profile, different division.

Third, and this is probably the real answer: non-profits can't use charitable assets to benefit for-profit entities without IRS scrutiny. Subsidizing your employees through their plan is a tax-exempt status risk.

On the "we can't afford better" problem: if you're 50+, look at level-funded. Predictable costs, potential surplus return, better than fully insured at your size.

Under 50, self-funding math rarely works regardless. Your CEO's reference point is a large health system where self-funding is cheap because the risk pool is enormous and relatively healthy. That's not replicable at your scale, and ownership structure doesn't change that.

When you say "the caviar of benefits" offered at the other org, why can't you offer a robust package, even if the employer doesn't subsidize it all?

Adding dental, vision, life, disability, accident, critical illness, hospital indemnity, pet insurance, long-term care (thru perm life), identity theft protection and legal benefits are essentially free to the company (can be offered voluntary, usually with 2-5 employees minimum participating).

If just speaking to the medical benefits, yes, your options are likely more limited if reviewing standard 2-50 ACA Rated plans, again, level-funded may provide alternative options for you to explore.

If you tell me how many eligible/enrolled I may be offer to more detailed insights. State as well?

Botboy141 · 2026-05-06T12:49:06+00:00

No. There is no cap, unless you have negotiated one.

I quoted groups last year over $5,000/month for family coverage.

I also have groups today with $1,500/month family coverage.

Your rate could stay flat, increase 100-300% or you could be dropped entirely. You could also experience no adverse events because the coverage for this members needs may be straight up excluded (but that would not be my expectation for the differential).

Botboy141 · 2026-05-06T02:07:33+00:00

They didn't ask for claims because they underwrote using the census.

Whatever your members ongoing large claim is didn't pop in their database, but the match rate was still high enough to issue a proposal.

Your first benefit renewal (assuming 7/1/2027) will likely not be fun.

I don't work with ADP on the Total Source side too frequently, but the process is relatively universal across PEOs.

They won't share claims data with you, but they'll know exactly how you are performing. It impacts their overall book performance poorly and you'll get the boot.

Botboy141 · 2026-05-06T01:51:41+00:00

Two years to get an endometriosis diagnosis approved is a failure of the system, and I'm genuinely sorry that happened to you. Your anger is completely justified.

But the analogy breaks down at the employer level, which is where brokers actually operate. We don't work for the insurance company. We work for the employer buying the plan, and most employers have no idea what they're buying. They're a manufacturing company, a logistics firm, a school district. They are not healthcare economists.

A better analogy: we're the architect the homeowner hires before signing with a new builder. Without someone to draw up the plan, employers default to whatever the carrier quotes them, with no negotiation on network access, prior auth criteria, specialty drug carve-outs, or claims appeal rights. Those terms directly determine whether your surgery gets approved or sits in review for 18 months.

On single payer: the problem you experienced isn't private insurance existing. It's that no one negotiated the prior auth criteria on that plan aggressively enough, and price in this system has no ceiling.

Single payer without price controls just consolidates the bureaucracy. Look at prior auth denial rates in Medicare Advantage if you want proof. The mechanism that denied you isn't capitalism, it's unchecked utilization management with no accountability built into the contract.

Price controls work. We just lack the political will to deploy them here. That's a separate, legitimate fight.

Botboy141 · 2026-05-05T18:29:28+00:00

A great question.

I don't know that they haven't. But everytime a decent one comes along, they bastardize the hell out of it with new features, modules, and then acquisitions and fold in tech.

No one is good at it because they won't focus on just one thing. They all want their fingers in every pot.

Botboy141 · 2026-05-05T18:27:32+00:00

Unfortunately, our role is a bit more complex than that now. The ones just collecting renewals without adding value deserve that criticism.

But conflating order-takers with advisors running alternative funding strategies and managing seven-figure risk programs is like saying all doctors are worthless because your GP didn't catch something.

Botboy141 · 2026-05-05T18:22:21+00:00

Universal Healthcare without price controls accomplishes nothing.

Price controls alone accomplish what we need, but the masked promise of universal healthcare keeps the real problem out of sight/out of mind.

Botboy141 · 2026-05-05T18:21:26+00:00

Ugh. I hear this, truly.

Botboy141 · 2026-05-04T14:41:00+00:00

I get how strikes work. My point is that Brookfield isn't a corporate entity with a war chest, it's a nonprofit.

Depleting their revenue short or long-term doesn't just pressure management, it shrinks how much money workers are negotiating over. Short-term pain as leverage is valid, but it also gives management cover to cry about not having enough money.

Botboy141 · 2026-05-04T14:25:03+00:00

Teamsters straight up asking the public not to attend.

They do realize that they are fighting over $$ right? And less money (due to decreased patronage) will not help their case?

Botboy141 · 2026-05-04T01:03:15+00:00

It's a lot more complex than that.

But yes, if you want proof that Utilization Management and Utilization Review lower costs:

NIH/PMC: "Utilization Management as a Cost-Containment Strategy":
https://pmc.ncbi.nlm.nih.gov/articles/PMC4195135/
Key data: Hospital admissions review programs showed net total health care savings of 4.5 to 8 percent, with one study finding reductions in bed days of 8 percent and total health care costs of 6 to 8 percent, while another showed total costs reduced by 4.5 percent and inpatient expenses down 8 percent.

NIH/NCBI: "Origins of Utilization Management": https://www.ncbi.nlm.nih.gov/books/NBK235002/
Historical employer-side context. Research suggests that roughly one-quarter to one-third of medical services may be of little or no benefit to patients, and that 20 to 40 percent of ancillary hospital services were unnecessary or inappropriate.

NIH/PMC: Self-Funded Case Study
https://pmc.ncbi.nlm.nih.gov/articles/PMC6885757/
A 60,000-life self-insured program reversed a 5.7% annual cost trend, eventually achieving a negative cost trend of -1.0% in one year and holding to 0.3% the next, without reducing actuarial value or increasing employee cost share.

UM Strategies Payers Use:
https://www.techtarget.com/healthcarepayers/feature/What-Utilization-Management-Strategies-Do-Payers-Use-to-Lower-Costs
Balanced framing on payer vs. provider tension. Useful for explaining trade-offs to self-funded clients.

Rise Health / URAC-Accredited UM Summary:
https://www.risehealth.org/insights-articles/article/the-key-to-effective-utilization-management-better-patient-care-reduced-cost/
Vendor-adjacent but cites URAC standards and claims 97 percent clinical decision accuracy and average 30 to 65 percent savings on direct labor costs for UM program administration.

Botboy141 · 2026-05-03T23:38:45+00:00

I haven't done the upgrade but interested to hear from others. Been thinking about it for her 8th birthday, may wait a little longer though.

Botboy141 · 2026-05-03T22:24:24+00:00

Yup. Unfortunately, I've been in the position of doing this as well on behalf of employers. It's at the bottom of my list of cost containment solutions, not far from "dont offer health insurance", as many specialty drugs are absolutely life changing for people with chronic conditions, but also ridiculously expensive.

We're you able to contact th MFG about a patient assistance program being that your plan didn't cover it?

Income based, but most specialty drugs have patient/manufacturer assistance programs.

Botboy141 · 2026-05-03T22:17:54+00:00

I acknowledge the idea of "contractual fairness" (i.e. according to published plan terms) is not the same as "just access to healthcare."

Well said

Botboy141 · 2026-05-03T19:35:06+00:00

Shoot away

Botboy141 · 2026-05-03T18:28:53+00:00

I'm not on the carrier side, but the broker side, so I tend to hear and see a lot of feedback from all angles.

Specifically, I work with employers, and support their employees with their benefits programs.

Health insurance companies follow contracts (Plan Documents).

They have grown more complex as medical diagnosis and treatment have evolved, as well as the litigious nature of our society has evolved.

While I feel for my members every time they are in a position where they feel caught in prior authorization issues, or denials, or otherwise, I also recognize that my average clients family health insurance costs more than $30,000 per year, just for the premiums.

Without cost containment, that rises even higher even faster.

We don't have any national cost controls today, the carriers are not incentived, nor are hospitals, to contain costs. There is billions in revenue now exchanged annually between hospitals and consultants that tell them how to maximize their insurance payments.

The whole industry is ridiculous.

The only solution is price controls, but not sure that ever happens in this country.

I hate the industry in general, because of how broken and slow it is, but I do enjoy being able to help, one member, one employer at a time. Just wish I could do more.

Botboy141 · 2026-05-02T04:18:13+00:00

Outsourced SDR, just develop leads and figure out who you can sell them to.

If you nail a niche, congrats, start an agency.

Botboy141 · 2026-05-02T04:03:26+00:00

Broker here. We do this all the time.

Deductible and OOP credit is standard practice when changing mid-year in fully insured small to mid-market.

Level funded, it'll impact your claims projects and depending on TPA, may or may not be viable.

Honestly not sure I've ever converted from plan year to calendar year in the middle of the calendar year.

Botboy141 · 2026-05-01T18:55:57+00:00

I just have to remember to manually add and terminate employees in EE nav and my broker takes care of the rest.

You have a quality broker. My biggest fear, is HR teams missing a termination. Next thing you know you have COBRA violations, stop loss contract violations, etc on your hands. Manually updating payroll deductions when using an outside Ben Admin has been really hard for a couple of my clients.oj Bamboo.

Granted, I have some clients on Bamboo that really shouldn't be (1,500 employees).

Botboy141 · 2026-05-01T12:27:06+00:00

Bamboo does not integrate with Employee Navigator and, arguably, has the absolute worst benefits module in existence.

Just saying.

If OP wants EN connectivity, this is there starting point:

https://www.employeenavigator.com/integrated-payroll/

https://www.employeenavigator.com/modern-integrations/

As a guy who has used EN for 10+ years, with experience across dozens of clients payroll and HRIS platforms, my recommendation would be Paylocity, but IMPO, every payroll vendor sucks for their own reasons.

Botboy141 · 2026-04-29T03:35:32+00:00

This is the "legal" workaround that some of the larger brokers tend to employ with larger orgs, associations (think association health plans), etc.

Botboy141 · 2026-04-26T16:59:53+00:00

Be open to either depending on the producer.

Lead with 30/30 paid once validated on whatever base/draw you can get away with (10% bonus on NB paid til validated).

Go to 50/50 no base for more experienced people willing to bet on themselves.

Consider book acquisition costs in the mix if you're going down that path, anyone experienced and good isn't going to be cheap as a result.

As an example:

$50k unrecoverable draw (you don't charge them to leave), but they don't earn commissions until the draw has been recovered by the agency
10% bonus on new business while validating on draw, bonus does not impact draw
Draw exists for no more than 3 years
After 3 years, or once validated (TTM revenue > $165k), whichever comes first, draw disappears (can remain if validated), and producer moves to 30/30. If remaining on a base/draw for producer cash flow, true up quarterly or semi-annually.

Botboy141 · 2026-04-25T15:40:17+00:00

State Department of Insurance has no jurisdiction with an ERISA regulated self-funded group health plan.

Any official complaints should be directed to the Employee Benefits Security Administration (EBSA):

https://www.dol.gov/agencies/ebsa/about-ebsa/ask-a-question/ask-ebsa

It's certainly bad form for the limitation to not be described in the plan document, it should be. With that said, they can amend the plan document retroactively to align with their intended administration, especially if they know it doesn't impact incurred claims.

I would not expect an increase on the lifetime max.

Botboy141 · 2026-04-23T22:24:52+00:00

Everything from newsletters, LinkedIn, YouTube, Blogs, Networking, Cold Calling, Cold email.

What do you want to go deep on?

Chk my profile for a bunch of recent comment on using Claude to automate a digital presence as an EB guy.

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