Novo Benefits was founded in 2007 as a premiere self-funded solution focused on bringing Fortune 500 benefits to mid-market employer groups. As self-funding experts we are constantly searching for the best products and services to help our clients maximize their benefits plans and stretch their dollar.
Our Unique Approach
Insurance is complicated and expensive. It’s easy to get lost in the endless options available for group health benefit plans. Novo Benefits specializes in creating self-funded insurance solutions that change the way you see benefits. Our unique approach can help you eliminate wasteful spending and let your plan do what it should—take care of your employees without breaking the bank.
The Novo Benefits Difference begins with four basic philosophies that set us apart.
Independence
You can trust that we will fight for you. Our refusal to accept any overrides or hidden revenue streams ensures you get the best deal and that your interests are at the center of every solution presented and decision made.
Transparency
You never need to worry about what you don’t know. Because of our commitment to full transparency you always have complete insight into all revenue streams, contract terms, and plan components. We will educate you every step of the way.
Tailor Built
Each plan we build is customized to meet your specific health care benefit goals, regardless of the size of your organization or the number of employees. We constantly vet industry offerings so we can bring you cutting edge solutions.
Expertise
Our team has been handpicked from the self-funded industry bringing the best talent available in the market. Let our expert team guide you through the confusing world of insurance.
Frequently Asked Questions
Do you have questions about health benefits and insurance plans? If you cannot find the answers to your question below, contact us for guidance from our team of experts.
Self-funding is an alternative method of paying for your company’s health insurance. The easiest way to understand it is to compare it to the more traditional fully insured program. Insurance is all about the sharing of risk. When you buy regular insurance, you pay a set premium to the insurance company. The premium you pay is based on a process called underwriting. The insurer considers the health information of your employees, the size of your company, and past claims experience, to come up with a premium that they calculate will cover the cost of your anticipated claims and still provide them a healthy profit.
Under a self-funded model, instead of paying a set premium to an insurance carrier, your organization pays claims as they are incurred by your employees. With most self-funded health plans, particularly with small to mid-size employer groups, the company also purchases stop loss insurance to limit their risk exposure. To learn more, click here.
Once everything is in place, your self-funded plan works almost exactly like a regular insurance plan. Your organization pays a set amount for each employee into a special account that is maintained either by you or by the Third Party Administrator (TPA) that administers your plan. When your covered members see a physician, go to the hospital, or have a prescription filled, a claim is sent to the TPA, who pays it with a check drawn on the account into which the funds were deposited. The TPA also issues checks from this account to cover the administrative and overhead costs of the Plan, including the monthly premium for your Stop Loss Insurance, if applicable.
There are two primary advantages to Self-funding. The first is that, in general, your costs are much lower. The typical health insurance company expects to apply about 30% of your insurance dollar towards “overhead” expenses, including administrative costs, re-insurance (insurance bought by the insurance company to cover the possibility of extraordinarily high claims), general reserves, and profit. Under Self-funded plans, on the other hand, the overhead expense is usually 20% or less of the total dollars. This cost savings, which may be considerable, goes directly to your organization’s bottom line. The second advantage is that you have much more direct control over the benefit structure and other aspects of your health plan. With traditional insurance, you can only choose among the range of plans that the insurance company offers; you cannot usually customize benefits within a given plan that you have chosen; and you don’t get much insight into your population’s utilization. When you self-fund, you receive as much or as little information during the plan year as you choose. There are a wide range of reports available that show how covered members are utilizing your plan, which can help fine-tune your plan along the way to get the most from your health care dollars.
A PPO network is a group of medical providers, such as hospitals and doctors, that are grouped together to create a network of participating providers. These Preferred Provider Organizations (PPOs), along with their members, have agreed to accept pre-negotiated, reduced fees for most of the services they provide.
Novo Benefits works with a range of provider networks nationwide to make it possible for you to buy your health care at a reduced cost. You pay less if you use providers that belong to the plan’s network. These savings translate into lower costs to your plan, and reduced out of pocket expenses to your members.
The biggest single risk to any organization with a self-funded plan is that the health plan’s expenditures could end up higher than anticipated when you established your basic funding level. There are two types of insurance you can purchase to limit risk to your plan, Specific and Aggregate. Purchasing specific and aggregate insurance provides peace of mind and lets you sleep at night knowing in the event catastrophe strikes, your plan is covered. Our team of experts will guide you through the process of risk evaluation and budgeting to ensure you are prepared and have the funds to cover the cost of your benefit plan.
The ideal size for a company to self-fund is 75 or more employees. However, we have many smaller client companies who have maintained successful self-funded plans for several years. Whether you have 50 employees or 10,000 Novo Benefits can build a custom plan that is right for you.
Novo Benefits partners with local brokers to bring the best solutions to the mid-market. Our wholesale arrangements and proprietary contracts enable us to offer mid-market employers better benefits that are typically only available to Fortune 500 companies.
With a self-funded approach, the employer has greater freedom to build a benefits program that fits its unique needs. You’re not restricted to the programs offered by insurance carriers, but rather can choose your own cost and utilization controls, service providers and networks, and health plan designs. Self-insured plans also benefit from the governance of ERISA, which pre-empts state insurance laws and thus allows uniformity in benefit offerings for multi-state employers.
Self-funding typically offers the employer access to data that provides insight into the status of the health plan. You can track key indicators such as total charges, payments, and provider utilization. Powerful data analytics tools can maximize the effectiveness of your data, allowing you to delve into the details to understand health plan trends and determine what is driving your costs. Novo Benefits uses a data analytics tool that provides a 360 degree view of an employer's population. This comprehensive, cutting-edge tool allows you to isolate key cost drivers and trends, forecast future spend before it's too late to engage, view complete population of employees, spouses, and dependents, and stay connected with real-time alerts on your population.