Contractors often disclose the cost savings of self-insured plans with excitement, but buyer beware. Most contractors are surprised when I don’t immediately commend them on cost savings and instead ask them, “Did you know there are ‘special‘ compliance requirements for self-insurance plans and failure to meet the compliance requirements makes the cost unallowable?” Most self-insurance plans are established by contractors with the intention of lowering fringe benefit rates, but as with all things in government contracting, it’s more complicated than that. Failure to follow the Federal Acquisition Regulations (FAR) can put the cost at risk for a complete disallowance.
<a target="_blank" href="http://farsite.hill.af.mil/reghtml/regs/far2afmcfars/fardfars/far/31.htm#P597_120019" …read more
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