Self-funded plans
Maximum control, with real volatility
You pay claims as they arise, backed by stop-loss insurance. Generally suited to larger and more established groups.
How it works
Rather than paying premium to a carrier, you fund a claims account and pay medical costs directly as employees use care. A third-party administrator handles the processing, and a provider network supplies the negotiated rates.
Stop-loss insurance protects you at two levels — individual, which caps any one person’s claims, and aggregate, which caps the group’s total for the year.
Because you’re paying actual costs, a healthy year costs you genuinely less, and you keep the difference rather than handing it to a carrier.
Suits employers who
- Have enough employees to make claims reasonably predictable
- Have cash reserves to handle month-to-month swings
- Want full claims visibility to drive plan design
- Want control over benefits rather than off-the-shelf plans
- Have administrative capacity, internally or through a partner
The honest caveats
Cash flow is the thing people underestimate. Claims don’t arrive evenly, and a heavy month is a real bill.
Compliance obligations increase, and fiduciary responsibility sits with you rather than the carrier.
This is not a starting point for a ten-person business. But for a growing employer who has outgrown fully-insured pricing, it’s often where the conversation eventually lands.
Not sure which structure fits?
That’s the conversation. Headcount, claims history and how much volatility you can carry will point to the answer.