Historically, a self-funded plan is more cost effective for the Employer than a fully-insured plan since many expenses associated with a fully insured plan are eliminated. Gains due to better-than-expected claims experience belong to the employer, not the insurance company. In addition, employers with favorable claims experience do not subsidize those with poor experience.

Employers often find they experience the following advantages when operating a self-funded program: 

  • Lower cost of operation
  • Increased cash flow 
  • Greater control of plan design
  • State mandated benefits are avoided
  • Accurate Claim Processing
  • Administration tailored to the Employer’s needs
  • Improved customer service
  • Cost and Utilization Controls
  • Elimination of most Premium Tax
  • Risk Management effectiveness through Stop-Loss Insurance (Reinsurance Coverage)


Considering Self-Funding?