Barter may help Self-funded Health Plans

Many employers throughout the US use self-funded health plans, directly taking on the financial responsibility for the healthcare expenses of their employees. In these types of health plans, employers either pay claims as they are incurred, known as self-funding, or pay a flat monthly amount into a claims fund established and managed by a Third Party Administrator (TPA), known as level-funded. When an employee incurs healthcare claims, the employer pays through one of these mechanisms. Since these businesses are using their own capital to pay claims, barter can conserve their funds.

In a self-funded or level-funded health plan, if the healthcare expenses exceed a set limit, most plans have stop-loss insurance to protect the employer from additional bills. The premium for stop-loss insurance is a significant component of the cost for a self-funded or level-funded employer and when claims go up, so does the cost of stop-loss and their renewal rates. Paying claims with barter may be a strategy that protects an employer’s self-funded health plan from triggering stop-loss insurance which will result in higher stop-loss premiums upon renewal.

While self-funded businesses can conserve cash by not spending it, level-funded businesses receive a refund from the plan TPA of any claims funds remaining in their claims account. This positions barter as a tool for recouping cash. Since many employers are self-funded or level-funded, there is a market for assisting these businesses in conserving cash, recovering cash, and maintaining a financially viable health plan.

Using barter to conserve cash in a self-funded or level-funded plan, while also minimizing the use of stop-loss is a two fold strategy for lowering healthcare costs for businesses.

MediBarter plans to help self-funded employers and their TPA identify opportunities to use barter as opposed to the plan’s cash reserves.  Barter may be used for high frequency healthcare expenditures such as doctor’s visits, as well as high cost surgeries making barter a unique strategy for self-funded and level-funded employers to conserve much needed cash.