The beauty of self-funding is that employers can realize savings in both the short- and long-term. Once you take control of your plan’s health claim costs, the amount you save in the years ahead has the potential to keep increasing.
Add to that the savings you can achieve through other cost containment programs like medical advocacy or telemedicine and your bottom line just keeps looking better and better.
Let’s consider the most recent and multi-year medical plan costs for Cypress clients as an example.
In 2015, the average PEPY (per year per employee) cost for Cypress was $9,372 and the PEPY cost for plans on a national basis was $15,223.67. Some simple subtraction shows that Cypress plan costs came out to an average of $5,851.67 less per employee. So what does this mean for a company with 50 employees? It amounts to nearly $300,000 in savings.
This is a pretty substantial dollar amount for a single year, don’t you think? Imagine adding up the results for multiple years and how much you’d see in long-term savings.
In the three years leading up to 2015, Cypress’s average PEPY costs ranged from 30.09-36.02% less than the national costs. This averages out to a savings of $4,538.44 per person. Again, multiply this number by 50 employees and then multiply the new total by three years. That’s another $680,000-plus in savings.
Many employers are pretty excited by the numbers they see after their first year in a self-funded plan, and who can blame them? This is oftentimes just the start to a savings trend that can continue to climb higher.
And think about this. The more proactive you are about building your self-funding plan to include all of the savings-centric programs that make sense for your work population, the more dollars will remain in everyone’s pockets.