BUSINESSWEEK ONLINE : JULY 10, 2000 ISSUE
FRONTIER -- FEATURES Remedy #2: Self-Funding with Stop-Loss HOW IT WORKS: Instead of paying big insurance premiums, your company spends the money directly on employee medical bills. To protect against unexpected or catastrophic illnesses, you buy less costly stop-loss insurance, which kicks in when claims reach a preset amount. WHO IT'S FOR: Small companies with more than 25 employees who are young and in good health. WHERE IT'S OFFERED: In all 50 states. This option has long been a mainstay of large employers, but is still relatively new among small employers. WHAT'S GOOD: Since these plans are subject to federal rather than state regulations, you have more control over coverage. You'll also avoid having to pay the 2% to 3% state tax on premiums for fully insured plans. You can usually save about 6% to 12% in total outlays. For a 50-employee group, fixed costs are typically half those of a fully insured plan. WHAT'S NOT: If your workforce includes older employees or some with chronic medical conditions, your risk goes up. The smallest companies are especially vulnerable, since one person's serious illness can have a disproportionately large impact on expenses and premiums. Companies with fewer than 25 employees may find it hard to get stop-loss coverage. WHERE TO GO: You'll need a third-party administrator to process claims, find a health-care network, and buy stop-loss insurance. Contact the Self-Insurance Institute of America Inc. (800 851-7789). _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP					RELATED ITEMS The Health Care Crisis CHART: Ouch! The Nation's Smallest Companies Faced the Biggest Hikes in Health Care Premiums TABLE: Remedy #1: Medical Savings Accounts TABLE: Remedy #2: Self-Funding with Stop-Loss TABLE: Remedy #3: Split Funding TABLE: Remedy #4: Association Health Plans TABLE: Remedy #5: Consumer Choice Health Purchasing Group CHART: Who's Covered Commentary: Search for a Cure INTERACT E-Mail to Business Week Online

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