The Building Blocks of Self-Funded Health Plans

Self-funded health plans give employers greater flexibility in designing and managing benefits. They also raise a practical question early in the process. Who is responsible for what?

Unlike fully insured coverage, a self-funded plan relies on several partners working together. Each plays a specific role, and understanding those roles helps employers manage their plan more effectively over time.

Plan Sponsorship

The employer serves as the plan sponsor and carries the financial responsibility for claims. This role sets the direction of the plan and shapes how benefits are delivered. While third-party partners and resources handle operational tasks, authority remains with the employer.

Key responsibilities often include:

• Funding employee claims
• Determining plan design and coverage levels
• Selecting and overseeing vendor partners
• Medical and pharmacy claims processing
• Eligibility and enrollment management
• Member services and plan communications
• Specific stop-loss, which limits exposure tied to individual members
• Aggregate stop-loss, which caps total claims for the plan year
• Managing formularies and coverage rules
• Contracting with retail and specialty pharmacies
• Administering pricing and rebate arrangements
• Evaluating vendor performance
• Supporting plan design changes
• Interpreting data to identify opportunities

Claims and Administration

Claims processing and plan operations are typically handled by a Third-Party Administrator (TPA). The TPA manages the mechanics of the plan and serves as the primary point of contact for members. Although the TPA runs daily operations, it does not ensure the plan or assume financial risk.

Administrative support commonly covers:

Risk Management

Stop-loss coverage helps protect the employer from large or unexpected claims. This protection is usually structured in two ways:

Together, these protections allow employers to self-fund routine claims while managing financial variability.

Provider Access and Pricing

Provider networks play a significant role in both cost control and employee experience. Networks negotiate rates with hospitals and physicians, determine where employees can receive care, and influence how services are used. Employers may choose national, regional, or customized networks depending on workforce location and plan design.

Prescription Drug Oversight

Prescription drugs often represent a growing share of total plan spending. Pharmacy Benefit Managers oversee how medications are priced, accessed, and managed within the plan. Their work typically includes:

Because of the financial impact, this relationship receives increased attention from many employers.

Advisory Support

Advisors and consultants help employers navigate the structure of a self-funded plan. Their role extends beyond placement and often includes:

As a third-party administrator (TPA), Point C supports employers across the full plan lifecycle. Unlike traditional TPAs that focus on claims processing, Point C integrates administration with in-house cost containment, care management, compliance navigation, and consumer-driven solutions. This helps connect strategy to execution rather than addressing issues in isolation.

Bringing the Building Blocks Together

A self-funded plan relies on coordination across multiple partners, each influencing cost, compliance, and employee experience in different ways.

Point C works alongside employers and their advisors to bring structure to that complexity. By aligning plan design, administration, risk protection, pharmacy strategy, and data insights, Point C helps employers move from reactive decision-making to a more deliberate, long-term benefits strategy.

That means fewer disconnected decisions, better use of available data, and a plan that is managed intentionally rather than reactively. By helping employers understand how each component affects the others, Point C supports more informed decisions and steadier plan management over time.

If you’re exploring how to structure or refine your self-funded plan, you can connect with a Point C expert to discuss options and next steps.