ERISA allows for self-funded employers to design multiple medical plans to meet the specific healthcare needs of their employees rather than offering a one-size-fits-all health plan.
Under ERISA, employers with self-funded plans can offer their employees traditional health benefit plans but can add on additional health benefits that are customized for certain people or groups with chronic conditions. Designing plans that address specific health concerns serves to improve employee health, increase productivity, reduce absenteeism and reduce overall healthcare costs. Self-funded plans have the benefit of being protected from state insurance laws, opening the door to customize health plans and choose provider networks by direct contracting with hospitals and health systems. Welfare benefit plans under ERISA create an abundance of opportunity for employers, hospitals and health systems to partner and achieve outcomes that benefit both.

Opportunity for Hospitals and Health Systems

Hospitals and health systems can establish direct contracting relationships with self-funded employers in their local community. They can utilize their resources, services and providers to offer employers a primary and preventive care narrow network within the benefit plan that will improve employee health outcomes and reduce healthcare costs. A direct contracting relationship affords the opportunity for the employer and the health system to share savings that result from tailored welfare benefit plans. This will allow hospitals and health systems to grow patient volume while simultaneously pivoting to a value-based care model. Employers will benefit from having local resources and expertise, and the ability to choose their network of providers.

Benefit to Employers

By offering tailored health plans, self-funded employers can work closely with health systems to more effectively address chronic conditions and deploy early interventions before employees move to a higher risk level. By having the ability to offer flexible benefits that address specific chronic conditions, the employer can decrease absenteeism, enhance productivity and avoid costs that are associated with hospitalization, short-term and long-term disability. Not only will it result in better health outcomes for the employee, it will also lower healthcare costs for the employer as they invest in early interventions and specialized care that will keep employees out of the hospital.

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