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  • Self Funded or Co-operative Plans Can Control Costs

      As premium prices continue to rise for the small to medium sized employer, many are now turning to self funding or co-operatives as a viable option to control costs and offer quality benefits.

    Another benefit of self funding is that employers can avoid the increased costs associated with benefit mandates built in to the the Patient Protection and Affordable Care Act (PPACA).   Carriers are increasing their premiums to cover the costs of the increased benefits required by PPACA.   According to Aon Hewitt, premium increases will be, on average,         8.8% in 2011, the highest in five years.  

    Self funded or co-operative plans will give employer groups the option to design their own plans to lower costs and maintain control over their benefit dollars.  A 2010  Kaiser Family Foundation survey found that these types of plans  sold for employers with less than 200 employees increased from 12% to 16% of the plans sold between 2008 and 2010, covering more than 70 million Americans.

    A qualified benefits administrator will help an employer determine if this is the right approach for their employees, as well as funding options that would be beneficial to employ. 

    While the state of PPACA remains unclear until all legal challenges are completed and all regulaltions implemented, it is clear that there will be a dramatic uptic in premium costs.   By exploring the options available through Self Funding or Co-operatives, it is possible for emplyer groups to regain control over their premum dollars and manage costs.

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