SPHR · Question #136
The best reason for an employer to self-fund its healthcare benefit program is to:
The correct answer is B. maximize cost savings.. The primary reason employers choose to self-fund healthcare benefits is to maximize cost savings (B). At the SPHR level, self-funding is a strategic financial decision rather than a wellness Self-funded plans allow employers to pay actual claims incurred rather than fixed insuran
Question
The best reason for an employer to self-fund its healthcare benefit program is to:
Options
- Areward employees' well-being.
- Bmaximize cost savings.
- Cminimize administrative burdens.
- Dreduce internal staffing levels.
How the community answered
(20 responses)- A5% (1)
- B95% (19)
Explanation
The primary reason employers choose to self-fund healthcare benefits is to maximize cost savings (B). At the SPHR level, self-funding is a strategic financial decision rather than a wellness Self-funded plans allow employers to pay actual claims incurred rather than fixed insurance premiums, avoiding carrier profit margins and certain state insurance taxes. Employers also gain access to detailed claims data, enabling better cost management, plan design, and vendor Employee well-being (A) is supported through plan design but is not the primary driver. Administrative burden (C) typically increases with self-funding. Reducing staffing (D) is unrelated. SPHR exam content emphasizes understanding financial trade-offs and risk tolerance when evaluating benefit funding strategies.
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