How 831(b) plans can protect your practice from unexpected, uninsured costs

After five consecutive years of cuts, Medicare physicians can finally expect to see higher revenues in 2026. Following the passing of the One Big Beautiful Bill Act in July, Medicare physicians will observe a one-year 2.5% payment increase for 2026. This comes in addition to the reversal of a 2.83% pay cut and the temporary 2% payment increase that was applied through December 2025.

This news is welcome to practitioners who receive Medicare payments and have been impacted by inflation and other rising costs.

With higher revenues forecasted for 2026, practices should consider saving those extra funds to cover unexpected, uninsurable costs, including denied claims, reimbursement rate cuts and changes in government policies.

One way to do so is to make contributions to an 831(b) plan. This risk management tool was created by Congress in 1986 and allows businesses to set aside tax-deferred reserves to offset the impact of uninsured events, including earnings loss, government orders, business disruptions and more.

Physicians using 831(b) plans can gain peace of mind knowing they aren't at the mercy of traditional insurers, and they can focus on what's most important: delivering quality care to their patients.

Private practices should explore connecting with an 831(b) plan administrator who specializes in setting up and managing self-insurance options for small businesses. By leveraging 831(b) plans, plan administrators work alongside business owners to craft customized self-insurance plans that work for them and their specific needs.

One of our private practice clients shares that their 831(b) plan has complemented the recent changes to the Medicare payment structure, saying their plan "will allow their practice to stay solvent so they can continue to provide critically needed care to rural and underserved communities."

Another example of how 831(b) plans are helping our clients stay resilient involves a national consulting firm specializing in business management services that relies heavily on government infrastructure funding for substantial portions of their revenue.

When a sudden change in public policy abruptly terminated one of their government funding streams, the firm realized it would be on the hook to remedy the loss, estimated to be about $2 million. Traditional insurance policies typically exclude losses resulting from political decisions or governmental policy shifts, leaving businesses highly vulnerable to sudden financial disruptions stemming from political actions.

The firm quickly filed a claim under SRA's political risk policy within their 831(b) plan, and the policy provided coverage up to a limit of $600,000, significantly mitigating the financial damage incurred by the company. This immediate financial support enabled the firm to continue operations and stabilize its financial position during a critical transition period.

These are just a few examples of how 831(b) plans can keep all types of small businesses moving forward after unexpected incidents.

In the constantly evolving landscape of health care, insurance and public policy, medical professionals should have more agency when it comes to protecting and preparing their practices from the unknown. An 831(b) plan shifts that power from the insurer to the insured — back into the hands of the practice owner who leads the company, the way it is intended.

As the mainstream insurance industry remains volatile, it is up to every business leader to take the appropriate action to protect themselves, their companies, their employees and their clients. This means addressing the gaps where mainstream insurance providers fall short. Being able to self-insure can protect your practice from underinsured or uninsured unplanned events.

Doing so starts with a comprehensive, effective and affordable risk management strategy where they have the authority and ability to respond to immediate needs and impending crises. A customized 831(b) plan can help make that a reality.

Van Carlson is the founder and CEO of SRA 831(b) Admin , the largest administrator of 831(b) plans. Van has over 25 years of experience within the risk management industry and began his career with Farmers Insurance Group as an agent, eventually growing his book to be among the largest in his home state of Idaho. Van's primary goal is to continue the upward growth of SRA and continue to develop new products to bring to market.