Public entities across Wisconsin are navigating a familiar challenge: shrinking revenues and rising costs. For many school districts, municipalities, and technical colleges, employee benefits represent one of the largest and most complex budget line items. Finding the right funding model for your organization’s health plan can be the difference between long-term stability and constant cost pressure
How do you determine which model is the best fit and when it’s time to make a change?
Check out our interactive flowchart for more information on what benefit funding model could help you reach your goals:
Understand Your Current Position
Start by assessing where you are today. Review your organization’s current funding structure: fully insured, self-funded, consortium, or hybrid. Evaluate how well it’s meeting your financial and operational goals.
Ask yourself:
- Are renewal increases predictable and sustainable?
- Do you have access to claims data that enables proactive management?
- How well does your plan support employee engagement and retention?
This step helps clarify whether your current model is supporting your strategic goals or just maintaining the status quo.
Explore Funding Options
Each model offers distinct advantages and considerations:
- Fully Insured: Predictable costs and minimal administrative work, but limited transparency and flexibility.
- Cooperatives / Consortiums: These formal organizations share risk among similar entities for stronger buying power and collaboration among like-minded public entities.
- Level Funded: Combines the predictability of fully insured plans with some of the data access and control of self-funding. Employers pay a set monthly amount, with potential savings if claims are lower than expected.
- Self-Funded (Captive): Allows multiple employers, often within similar industries like school districts, to pool risk and gain the long-term cost advantages of self-funding while maintaining stability and shared protection.
- Self-Funded (Individual): Provides maximum control, transparency, and flexibility, but also places full financial responsibility for claims and plan performance on the employer.
The key is to evaluate not only the numbers, but also the level of control, transparency, and customization your leadership team needs.
Identify the Right Timing
Switching funding models isn’t just a financial decision. It’s a timing decision. Consider making a change when:
- Renewal projections signal unsustainable premium growth.
- Your leadership team is ready to act on data insights and cost-containment opportunities.
- You have internal bandwidth and/or support to manage a transition effectively.
- Your organization is ready to take on the challenge; remembering that change requires change.
Strategic timing allows your organization to capture the full value of a new model while understanding necessary transitions for employees.
Involve the Right Partners
The best funding decisions are made collaboratively. Engage your broker or consultant early to run multi-year projections, benchmark against similar entities, and model “what-if” scenarios. The goal is to make informed, data-driven decisions that balance cost, compliance, and employee experience.
Communicate and Educate
Even the most financially sound strategy can fall short if it isn’t well-communicated. Make sure employees understand why a change is being made and how it impacts them. Whether the outcome is immediately beneficial or not, transparent, proactive communication helps build trust, reduce confusion, and foster understanding during transition periods. Informed employees are more likely to engage constructively, even when changes are difficult.
