Self-Funding

Change the Way Health Benefits are Managed

For many employers, rising healthcare costs are only part of the challenge. Just as difficult is having limited visibility into what is driving spend and fewer opportunities to shape the plan around business needs.

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A self-funded health plan gives employers a different way to fund benefits, with more access to data and more flexibility in plan design for a closer connection between cost and decision-making.

Benefits of Self-funding
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The Limits of a Fully Insured Approach

A fully insured plan can offer predictability, but it can also leave employers with limited visibility and less influence over how the plan performs.

  • Unsustainable annual premium increases
  • Limited transparency into where healthcare dollars go
  • Paying for pooled risk that may not reflect your population
  • Less flexibility in plan design
  • Minimal control over the employee healthcare experience

Self-Funding Works for Employers

A self-funded health plan is a model where the employer pays for claims as they are incurred instead of paying a carrier a fixed premium to take on that risk.

Most self-funded plans include stop-loss insurance, which helps protect the employer from large or unexpected claims. That makes self-funding a structured approach to risk, not an unprotected one.

Compare Funding Models
Fully Insured

With a fully insured plan, the employer pays a fixed premium and the carrier assumes claim risk.

Self-Insured

With a self-funded plan, the employer funds claims directly and typically works with a third-party administrator, stop-loss carrier, and other partners to support the plan.

ERISA Shapes Self-Funded Plans

Many self-funded plans are governed by ERISA, which means they are regulated at the federal level rather than by the same state insurance mandates that apply to fully insured products.

That can allow for more flexibility in plan structure, depending on the employer's strategy and support model.

What Is Stop-Loss Insurance?

Stop-loss insurance protects the employer in a self-funded plan by limiting exposure to high claims. This is one of the key reasons self-funding is often more manageable than many employers assume.

Specific stop-loss helps protect against large claims from one individual.

Aggregate stop-loss helps protect when total plan claims exceed expected levels.

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Why Self-Fund

Self-funding is considered by employers who want a more active role in how their health plan is built and managed.

Cost Control

A claim may be selected because of dollar threshold, bill type, facility setting, coding irregularities, or other indicators that suggest closer review is warranted.

Financial Transparency

Have a better view of what is driving spend with more detailed data.

Flexibility

Shape benefits around workforce needs.

Employee Experience

Align plan structure, support resources, and vendor strategy more intentionally.

Better Fit Solutions

Evaluate specialized partners and programs based on plan goals.

Moving to self-funding usually follows a structured process.

For employers exploring a change in funding, this process can make it easier to assess readiness and compare options to plan more deliberately.

Step 01

Evaluate the current plan and available data.

Step 02

Model potential costs and savings.

Step 03

Design the plan structure.

Step 04

Implement with administrative support.

Step 05

Monitor results and adjust over time.

Is Self-Funding Right for You?

Self-funding is not the right fit for every employer, but it is often worth exploring when an organization wants more visibility and is prepared to take a more active role.

Explore Employer Resources

Typically have 50 or more employees

Have the financial stability to manage claim fluctuations

Want more insight into plan performance

Are open to a more hands-on benefits strategy

Go Beyond

Getting From Point A to Point B is the Standard.

Go Beyond with Point C

Frequently Asked Questions

What is a self-funded health plan?

A self-funded health plan is one in which the employer pays covered claims directly instead of buying a traditional fully insured policy.

What is the difference between fully insured and self-funded?

In a fully insured plan, the employer pays fixed premiums and the carrier assumes risk. In a self-funded plan, the employer funds claims directly and uses stop-loss coverage to limit exposure.

What is stop-loss insurance?

Stop-loss insurance protects self-funded employers from high-cost claims by reimbursing eligible expenses above set thresholds.

How do employers evaluate whether self-funding is a fit?

Employers typically look at workforce size, financial stability, claims trends, risk tolerance, and how actively they want to manage plan performance over time.