Successful Implementation of Self-Funded Medical Insurance

In this theoretical example, we will explore the experience of a business owner who successfully implemented self-funded medical insurance for their employees. Self-funded medical insurance is a cost-effective alternative to traditional employer-sponsored health plans. It allows businesses to have more control over their healthcare expenses and tailor the benefits to fit the needs of their employees.

John Smith, the owner of a small manufacturing company, decided to switch to self-funded medical insurance after experiencing rising premiums and limited coverage with a traditional health plan. With the help of a knowledgeable insurance consultant, John designed a self-funded plan that offered comprehensive coverage and cost-saving measures.

Key Features of John's Self-Funded Medical Insurance Plan:

Cash reserves: John set up a cash reserve account to cover healthcare expenses, ensuring that funds were available when needed.
Stop-loss insurance: To protect against catastrophic claims, John purchased stop-loss insurance, which limits the employer's liability for high-cost medical treatments.
Wellness programs: John implemented wellness programs to promote employee health and reduce healthcare costs in the long run. These programs included incentives for participating in fitness activities and regular health screenings.
Transparent pricing: John partnered with healthcare providers that offered transparent pricing, allowing employees to know the costs of medical procedures beforehand and make informed decisions.

Benefits of John's Self-Funded Medical Insurance Plan:

Cost savings: By self-funding the plan, John was able to cut costs significantly compared to traditional health insurance plans. The money saved could be reinvested in the business or used to enhance other employee benefits.
Flexibility: With self-funded insurance, John had the flexibility to customize the plan to meet the specific needs of his employees. This included offering a wider network of healthcare providers and additional wellness benefits.
Greater control: John had a clear understanding of the claims data and healthcare utilization of his employees, allowing him to identify cost drivers and implement targeted strategies to manage expenses.
Improved employee satisfaction: The comprehensive coverage and wellness programs provided by the self-funded plan resulted in higher employee satisfaction and engagement.

John's experience demonstrates the potential benefits of self-funded medical insurance for business owners. By implementing a thoughtfully designed plan and taking advantage of cost-saving measures, he was able to provide comprehensive coverage to his employees while reducing healthcare expenses. If you are a business owner looking for a more cost-effective and flexible health insurance solution, self-funded medical insurance could be worth considering.

Practice Leader(s)

Captive Practice Leader, Managing Director

Max Jong

Captive Practice Leader, Managing Director

Max Jong is the Captive Practice Leader and Managing Director at Risk Management Advisors, an alternative risk and captive management firm. Max began his career at Northwestern Mutual in 1994 after graduating from UCLA. Over 12 years, he built a successful financial services practice while heading up an office overseeing 50 professionals in Los Angeles and Irvine, California. The office was perennially one of the top producing organizations in the Northwestern Mutual system.

Max joined his partners at Risk Management Advisors in 2007 as he began to work with more sophisticated mid-market business owners. RMA specializes in the design, formation, and management of captive insurance companies. There’s also an emphasis on self-funded group benefits as well as other creative alternative risk management strategies. The firm assists business owners in better managing their risks without jeopardizing their balance sheets. In 2019, he headed up a merger with Risk Strategies, a Top 10 private national specialty insurance brokerage and consulting firm. Since then, he was appointed as the Captive Practice Leader to oversee the growth and development of the organization.

For five years, Max served as an Independent Director for Fiat Lux Risk and Insurance Company, one of the largest and most sophisticated captive insurance companies. Fiat Lux was established by the University of California Regents to better manage the broad risks of the University of California system.

Max has also been a lifelong supporter of Big Brothers Big Sisters of Greater Los Angeles. He initially volunteered to be a mentor in 1995 and is currently mentoring his second "Little." Max was asked to join the Board of Directors in 2000 and eventually served as their Board Chair. After 20+ years as an active board member, he continues to support the organization by serving as a Trustee.

He is married to Alice, and they’re raising two young children, Hunter and Hayden. Max and Alice are happily married despite her irreparable mistake of going to USC. He loves to travel, golf, and is a hopeful Lakers fan.