Page 2 - The Value of Self-Funding

2
Rising costs and increased instability in the healthcare marketplace has prompted more employers of all types and
sizes to consider self-funding (also known as self-insurance) as a solution to provide quality health benefits to their
workers and dependents.
This solution can offer many advantages, but like any significant business decision it should be given due
consideration, including appropriate consultations with knowledgeable business advisors, as self-insurance may
or may not be the best fit for an organization. This publication is intended to assist employers and brokers to
familiarize themselves with what is needed to effectively evaluate the self-insurance option for one’s business.
As shown in the 2013 Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2003-2013, (Exhibit A), the
premium for workers and employers has increased more than 80% in the past ten years. These figures include
self-funded, fully insured and other coverage options combined. These increases are not sustainable for either the
worker or the employer and therefore must change. The solution for many employers today is self-funding.
THE CHALLENGE OF AFFORDABLEHEALTHCOVERAGE
EXHIBIT A
Average annual health insurance
premiums and worker contributions
for family coverage
$9,068
$16,351
$11,786
$4,565
$2,412
$6,657
2013 2003
80% Total
Premium
Increase
89% Worker
Contribution
Increase
Worker Contribution Employer Contribution
Source: Kaiser/HRET Survey of
Employer-Sponsored Health
Benefits, 2003-2013.
THE PREMIUM FOR WORKERS AND EMPLOYERS HAS INCREASED MORE
THAN 80% IN THE PAST TEN YEARS.