Brokers bullish on self-funded products heading into 2021
Nine out of 10 brokers said in a recent survey that they have clients asking about self-funded products.
Health-care providers have a substantial opportunity in 2021 and beyond to attract members to their networks through self-funded products.
The U.S. Group Reinsurance Healthcare Turnkey business line at Reinsurance Group of America recently surveyed brokers about the future of self-funding. According to the survey, nine out of 10 brokers have provider clients asking about self-funded products, and nearly 80% have provider clients interested in offering self-funded products. Over the next four to six months, one-quarter of provider clients are looking to pursue self-funded products.
Related: COVID-19 and self-funded plans: Understanding the financial impact
Brokers report that their provider clients see self-funded products as an opportunity for growth:
- Every survey respondent selected “market growth opportunity” as a primary reason their provider clients have entered the self-funded market.
- Providers also are motivated by a desire to retain current clients considering self-funding (83%) and to stay on pace with or get ahead of the competition (58%).
- Brokers report that the strength of providers’ network and competitive employer stop-loss rates are the top factors for providers to successfully enter the self-funded market.
Brokers identified the following as the main challenges faced by provider clients wanting to enter the self-funded market:
- Distribution and distribution support were selected as the top challenges by a considerable margin.
- Understanding of self-funding and competitive employer stop-loss rates tied for the second- and third-biggest challenges, underscoring a need and opportunity for education and training.
- The need for a dedicated stop-loss partner ranked as the fourth-biggest challenge.
“The results of the survey reveal that brokers see a very strong level of interest in offering self-funded products among their provider clients in the near term,” said David Sipprell, a senior vice president for the company. “This confirms what we have seen over the past 18 months: There is a growing desire among health-care providers to offer a self-funded product and a growing need for support services to help make the transition to self-funding possible.”
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