2023 Forecast: Employers Self-Insure Face New Responsibilities and Opportunities
The shift from employer-sponsored health plans to employee self-insurance will continue to grow, and with it come responsibilities and opportunities employers must consider. Employers who choose to self-insure their health plans need to understand the risks they are taking on, as well as the advantages.
The Benefits of Self-Insuring
Self-insuring offers a number of potential advantages to employers, such as:
- Cost savings: By self-insuring, employers can potentially reduce their overall health insurance costs.
- Flexibility: With self-insurance, employers have the freedom to customize coverage that best suits their employees’ needs.
- Control: Self-insuring gives employers the ability to manage all aspects of their healthcare program, such as network access, benefits design, and pharmacy benefits.
The Risks of Self-Insuring
There are some risks associated with self-insuring, including:
- Financial risk: Employers are responsible for paying any claims that exceed their insurance funds. If claims are higher than expected, employers must cover the cost.
- Regulatory risk: Self-insured employers must meet a variety of complex requirements and regulations.
- Potential for litigation: Self-insured employers open themselves up to potential litigation over claims and benefits.
The Outlook for 2023
Looking ahead to 2023, employers who choose to self-insure will need to be prepared for the risks associated with it. They will also need to be ready to take advantage of the cost savings and flexibility that self-insuring can provide. As employers become more aware of the potential benefits, self-insurance will become increasingly popular.
Overall, self-insuring is a complex decision that requires a thorough understanding of both the costs and risks. By taking the time to understand the process and potential implications, employers can make the most of their self-insuring strategies in 2023.