Employers are searching for effective mitigation strategies to combat rising healthcare costs with varying success. Shifting costs onto employees — such as offering high-deductible health plans and other cost-sharing methods — has been tried, but can be damaging to businesses amid a competitive labor market.
Self-insuring, on the other hand, could help reduce costs and improve service. While self-insuring may not be suitable for all businesses, it can certainly help control healthcare expenses by allowing employers to set cost-sharing limits, choose healthcare networks, and establish stop-loss limits to ensure they don’t overspend. Before switching to a self-insured plan, employers should first weigh the pros and cons.