Published November 3rd, 2015 by Stephanie
Thanks to the skyrocketing price of health insurance premiums and the new federal tax on “Cadillac” health plans, “self-insurance” is becoming increasingly more popular both to state and local governments and to large corporations. Essentially, instead of paying health insurance companies to provide a package of benefits for a monthly cost, self-insured employers simply pay out the claims made by their employees directly. While this may not be cheaper than the premiums they’re paying now, this alternative does promise to be cheaper than the rates they’ll be paying soon.
Self-insurance is catching on all across the country, from the city of Pittsburgh, Pennsylvania to a school district in Florida. The advantages of self-insurance don’t end with cost reduction, either: since employers are much closer to their employees than health insurance companies are to their policyholders, they can more effectively keep track of the employees’ actions. Employers who offer self-insurance can, for example, provide a discount if their employees prove that they’ve been exercising and eating right.
The biggest drawback of self-insurance is, of course, the unpredictable nature of the future which leads people to buy insurance in the first place. Every insurance policy is essentially a bet: you bet that you’ll suffer some accident or disaster that will cost more than your overall premiums, and the bet pays off if the accident happens. As the one providing the payouts, self-insured businesses and governments are opening themselves up to the possibility of fielding too many injuries and diseases at once, something that’s easier to survive when you’ve got more policyholders paying in. As such, self-insurance is really only an option to large employers.
Of course, if you do belong to a company or a government that’s switching to self-insurance, one way your new policy can save money is by integrating a pharmacy discount card like the one which USA Rx provides. Our card is accepted at over 60,000 pharmacies nationwide, and we can provide up to 75 percent off of prescription medication both brand-name and generic. Contact us at [email protected] or 888-277-3911 to learn more and to find out how you can partner with us to make custom cards which you can hand out to all your employees.