Often a profitable solution
Businesses may select a self-insured plan entirely administered by AGA Benefit Solutions for medical and dental care coverage and weekly benefits.
When choosing such a plan, the company becomes responsible for claims related to these types of coverage, while the risk on the other benefits (life, accidental death and dismemberment, long-term disability) is entrusted to one or more insurers.
Self-insurance is a risk management technique that can prove highly profitable.
A calculated risk
In order to limit cost fluctuations for their clients, the underwriting team at AGA Benefit Solutions take three major steps:
- Level monthly remittances are calculated: they match the theoretical premium and allow for easier administrative management of the plan, calculation of cost sharing with employees and management of budget items
- Claims over a pre-established level are pooled through the purchase of stop loss insurance
- Quarterly experience reports are produced and discussed with the client in order to track the evolution of the plan’s financial situation
Potentially attractive savings
In a fully insured plan, premium rates include the cost of claims, insurance tax, administration fees, and risk and profit fees of the insurer, along with a provision for expected claims cost increase (inflation and higher use).
Self-insurance eliminates the risk and profit fees and reduces administration fees. Also, the claims paid reflect the group’s actual experience, which is often more favourable than the inflation assumption used by the insurer.
Is self-insurance a good solution for your group?
With information on your actual plan, we will prepare a projection that will enable you to make an informed decision on the type of financing best suited to your situation.
Obtain a quote by filling our form or contact us directly.