Alternative Benefit Funding is a form of self-funding that functions very similarly to an insured policy where the employer pays a set monthly amount based on the claim level they have chosen to fund to. But unlike an insured policy, the employer shares in a portion of the unused claims funds, after claim payments and plan costs. This approach allows even small employers to establish a monthly health plan budget and take advantage of the economic benefits of self-funding that many large employers have enjoyed for years.
- Employer pays a set amount each month during the twelve month plan year to fund the plan. The monthly payment is determined for each employer based on a thorough underwriting review and the claim funding level.
- Employers can directly benefit from innovative plan design measures (reduced employer and employee costs), that large, self-funded employers currently utilize.
- Unlike insurance, if claims do not exceed the amount funded by the employer, a portion of the unused claim funds are shared with the employer.