Dealers may want to consider self-insurance amid Obamacare uncertainty

Although self-insurance programs are available to companies and organizations with as few as two employees, Meyer acknowledged that greater cost savings with larger groups, beginning with 10-15 employees and more options can be considered as the group gets larger.

With this in mind, USMSS is considering the possibility of establishing a self-insurance program for its members companies, many of which do not have enough employees to consider self-funded programs on their own, according to Dow.

With the large number of members in USMSS, the potential for a very large group exists that might be conducive to offering such a self-insurance option. However, such a decision would be a big one for the organization, and USMSS board members voted last October to table the idea until this fall, Dow said.

“It’s at least a year away,” he said. “There’s an education process, and my sense is that the rules are going to change. When the dust settles, it may be something that the board would look into. Certainly, I think it would help the members, if they want to participate. But that’s something down the road.”

For dealers that want to pursue the notion of a self-insurance program, they do not need to wait until their current insurance year expires, Meyer said. In most cases, companies can switch to a self-funded option with only 30 days notice and no financial penalties, he said. Although it would have been ideal for dealer to become self-insured before the Obamacare law took effect last fall, switching to a self-funded program will remain a viable option throughout 2014.

“It still will be an option, and you’ll still want to strongly consider it,” Meyer said. “If, come March, I want to make a move and I want to look real hard at self-funding—even if I only have 15-20 employees, which I never thought was possible before—can I do it? Yes, you’ll be able to do it.”

In fact, Meyer said he typically is able to move an organization from a traditional insurance plan to a self-funding program in less than 30 days. Making the change to a self-funded approach to health coverage can be beneficial to organizations such as radio dealers, especially when compared to traditional insurance programs purchased from carriers, he said.

“[Self-insurance] lets you put your own plan together, you can delay a lot of the mandates, save money on a go-forward basis and get some accountability on your dollars and cents.” Meyer said. “With a fully insured plan, you pay your premiums and—at the end of the year—they tell you that you have to pay a 12% increase, and they don’t have to tell you why. That’s like playing poker and them not letting you know when you win.”