Self-funding isn’t a new concept, but it is one that has been traditionally reserved for larger employer groups. However, for various reasons we discussed in our last blog, market conditions today make self-funding an ideal strategy for many small employers as well.
How does this become a differentiator for you? Most small employers aren’t familiar with self-funding—and many haven’t even considered it as a funding strategy. In fact, because this is a newer trend in the small group market, many brokers are not talking about it either.
By introducing your small group clients—and prospects—to self-funding as an alternative to help manage costs and gain flexibility, you can position yourself as a knowledgeable expert who offers creative solutions that others don’t. Here are a few suggestions for using self-funding as a prospecting and renewal strategy.
1. Suggest as a way to avoid large increases
One of the biggest benefits of self-funding is control over costs, which often translates into money saved when all is said and done. If you have small group clients or prospects facing large increases (or who enduring large increases last year due to ACA), suggest a self-funded alternative.
2. Be prepared to answer questions
As we mentioned earlier, small groups are generally unfamiliar with self-funding, so it’s important that you come prepared to discuss details such as:
- Plan administration
- Stop-loss insurance
- The benefits of a wellness plan
3. Visually present options
The best way to introduce a self-funded alternative is to build a plan model and present it visually, compared to their current fully insured plan. This allows for easy explanation and for the client or prospect to ask questions about the differences.
Ready to talk self-funding with your smaller clients and prospects? First, take a look at our new e-book, Self-Funding for Small Groups. Don’t forget to share your questions and comments below!