Sola launches in growing employer self-funded health plan market

Photo: Orbon/Alija/Getty Images

Goodroot, which represents numerous companies, has announced the launch of Sola Health, which offers self-funded health plans to employers. While Sola serves groups of all sizes, their primary focus is on those with 25-200 employees. 

Sola delivers medical and pharmacy coverage at a lower cost than the premium and renewal costs commonly experienced with fully insured carriers, according to the released statement.

"In the last 15 years, 82% of Fortune 500 companies ditched their insurance carriers," says Steve Palma, president of Sola. "Smaller employers are looking to follow suit. Fully insured models – and their relentless cost increases – are forcing employers to offload more financial burden onto their employees or reduce benefit offerings to compensate."

Sola has zero-dollar care and offers targeted solutions for high-cost medical and pharmacy claims, which are true differentiators for employers in the self-funded market, the company said. It offers level-funded plans with major national carrier networks and more aggressive value-based pricing plans. Their team guides groups new to self-funding through the transition in order to mitigate unseen risks and protect businesses from potential high-cost claims and employee disruption, Sola said.

Employees get a user-friendly mobile app to manage their prescriptions, access digital ID cards, track deductibles and more. The Sola app also integrates benefit navigation, free virtual care and hospital financial assistance applications.

WHY THIS MATTERS

A self-funded plan is one in which the employer assumes the financial risk for providing healthcare benefits to its employees. Employers pay members' health claims directly to providers, rather than paying premiums to a health insurer.

While employers take on financial risk, the cost for employee coverage is generally lower.  

However, self-funded plans are exempt from the essential health benefits mandated under the Affordable Care Act. These provisions require insurers to provide coverage for broad categories of services; limit annual cost-sharing to specified amounts; limit deductibles for plans in the small group market; and meet minimum standards for actuarial value, according to AHIP. EHB requirements do not apply to health insurance coverage provided in the large group market, either fully insured or self-funded, nor do they apply to grandfathered health plans.

But the essential health benefits apply to health insurance plans on the ACA exchanges as well as those offered in the small group and individual markets outside the exchange, according to CAP, the Center for American Progress, a nonpartisan policy institute. 

THE LARGER TREND

The number of self-insured plans is rising. The percentage of employees covered by self-funded plans had increased from 44% in 1999 to 67% in 2020 before decreasing to 65% in 2022, according to statista.

The number of million dollar claims is increasing among employer plans, according to Sun Life.

ON THE RECORD

"Upon exploring self-funded plan options for our own company, it became clear that if we were going to provide best-in-class plans – with the desired cost structure, features and benefits – we would need to create them ourselves," says Goodroot CEO Mike Waterbury. "Self-funding isn't an overnight win for most groups. It is a long-term savings strategy, one that needs to be closely monitored. Interpreting data is key in order to adjust policies and strategies as trends are spotted." 

Twitter: @SusanJMorse
Email the writer: SMorse@himss.org