Self-funded Financing Option

For employers with more than 100 enrolled employees

Financing health care through a self-funded arrangement means you pay for your health care claims plus an administrative fee and a network access fee. You may also purchase the security of stop-loss coverage to ensure your working capital is not overwhelmed by a large claim.

When you choose the self-funded financing option, Wellmark Blue Cross and Blue Shield will process and pay claims for your covered individuals (known as members) according to the terms of the benefit options you have chosen. Wellmark Blue Cross and Blue Shield will bill you for the:

• Claims amount paid during the prior month
• Administrative fees
• Network access fee
• Stop-loss premium, if applicable

You retain responsibility for the payment of benefits under your plan.

Stop-loss Coverage

Stop-loss coverage protects you against large claims by limiting your financial liability for paid claims. Employers are limited to Wellmark Blue Cross and Blue Shield for stop-loss coverage. Two types of stop-loss coverage are available:

• Specific deductible stop-loss coverage – Sets a ceiling on your financial liability for claims costs per each covered member. You can choose from a wide range of deductible amounts in determining your company’s specific stop-loss level (e.g., $35,000 to $300,000). Wellmark’s liability is limited to the individual lifetime maximum level (e.g., $1,000,000) shown in the stop-loss policy. Specific stop-loss coverage begins paying when claims paid for a member during a contract period exceed the contract period specific stop-loss deductible amount you have chosen.
• Aggregate stop-loss coverage – Limits your financial liability for the total amount of claims expense for your group as a whole. Wellmark will estimate your anticipated claims for the year and add your chosen aggregate percentage to that estimate to calculate a stop-loss amount (e.g., 125 percent).

Advantages of Self-funded

• Your company’s cash flow may improve because you maintain your own reserves
• You choose weekly cash transfers or monthly billing
• You pay premium tax on the stop-loss coverage only
• Monthly reports provide detail of your group’s actual claims utilization
• You save if your group’s claims utilization is lower than expected
• Specific and aggregate stop-losses limit your group’s financial liability

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Wellmark Blue Cross and Blue Shield is an Independent Licensee of the Blue Cross and Blue Shield Association doing business in Iowa and South Dakota. Blue Cross®, Blue Shield®, and the Cross® and Shield® symbols are registered marks of the Blue Cross and Blue Shield Association, an Association of Independent Blue Cross and Blue Shield Plans.