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Self-Insured Groups: Myth vs. Fact

Myth #1: If I join a self-insured group and somebody else in the group has a catastrophic claim, I will have to pay more money and it could threaten my business.

Fact:

CHSI-managed self-insured groups are comprehensively protected against catastrophic injuries by insurance coverage with A-rated excess insurers. The excess carrier covers all costs of all claims that come from a single occurrence, whether it is one claim or 100. Each group pays an initial amount, such as $350,000, called the Self-Insured Retention (SIR). Catastrophic injuries do not require further funds from group members.

Myth #2: Self-insured groups are financially risky.

Fact:

CHSI has a team of financial professionals who closely manage the financial health of its self-insured groups. Each group has a Board of Trustees, comprised of business owners and Chief Financial Officers. CHSI produces monthly financial reports to these Boards that are on par with Fortune 100 companies. The rating plans for each group are established in liaison with a certified actuary to ensure adequate funds in the groups. The actuary performs studies on the group’s costs every year to ensure financial health of the group. Finally, each group is regulated and audited by state regulators. CHSI managed self-insured groups have met every financial test since the first group was launched in 1996.

Myth #3: If another self-insured group falters, my group and my business can be forced to pay for their liabilities.

Fact:

CHSI self-insured groups have ironclad financial controls and are secure. In the states in which CHSI operates, self-insured groups are ultimately supported by the tangible net worth of members. If another group faltered, that self-insured group would be responsible for a corrective financial plan first from its own membership, not from other self-insured groups.

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