What is a self-bill?

If you’ve made it here, you’re probably wondering…
“what is a self-bill?”

Well, it’s exactly what it sounds like. Instead of someone sending you an invoice for services, you bill yourself and pay accordingly.

Specific to employee benefits, self-billing allows employers to calculate their own insurance premiums for employee benefit coverages, effectively “billing themselves.”

Each month, employers must pay premiums to insurance carriers for the coverages that their employees are enrolled in. Think medical, dental, vision, and life insurance.

Traditionally, employers would enroll employees with insurance carriers, and carriers would, in turn, send a monthly invoice for the employer to pay.

This very normal method of billing has proven problematic over time, particularly for larger employers that experience employee turnover and plan changes on a daily basis. When enrollments change so frequently, it becomes difficult for carriers to provide an accurate and up-to-date invoice to their employer clients.

Enter the self-bill. Most employers manage their employee benefit enrollments on an HRIS platform, meaning that at any given time they know exactly who is enrolled in which plans. With access to this real-time enrollment data, employers are able to “bill themselves” far more effectively than insurance carriers can, ensuring that their invoice always reflects up-to-date coverages.

It’s easy to see the benefits of self-billing. The average SBP invoice for ancillary benefits alone (anything other than medical, dental, or vision) is $60,000 each month, but we’ve seen them as high as $500,000. Getting to dictate your own charges on such a significant dollar amount unlocks a major advantage for employers. Employers get to ensure accuracy across systems such as payroll and internal accounting, calculate the invoice only when ready, and easily make their own changes for enrollment errors or retroactive coverage adjustments.

There’s just one problem with self-bills today; they can be difficult and time consuming for employers to create.

At Self Bill Pro, our goal is simple: we provide HR departments with accurate and timely self-bills, making sure they don’t lift one finger in the process. We gather enrollment data each month and turn it into a perfect self-bill, providing the outputs to employers, brokers, and the carriers that they ultimately go to.

Simple, right? Even though you’re now a self-bill expert, it’s natural to have some lingering questions. Contact us anytime on our website, or email us at sales@selfbillpro.com.