What is Self-Funding?

Self-funding is another method for employers to purchase a health plan for their employees.  Employers looking for flexibility in plan design to minimize the negative impact of the ACA and want an opportunity to get money back, should considering self-funding.  Unlike a fully insured plan where the employer pays a fixed premium and insurance carrier keeps all of the savings, a self-funded plan allows the employer to partner with a health plan administrator and keep all of the savings.  The health plan administrator, also known as a Third Party Administrator (TPA), helps the employer build a self-funded plan that best fits their needs.  It is important to note that just like a fully insured plan, a typical self-funded plan limits the employer’s maximum cost through the purchase of stop-loss insurance.  TPAs, integrate the best health risk management solutions to maximize discounts and reduce utilization to deliver the most savings to the employer.

Why Self-Fund in a Nutshell?

Self-funded health plans enjoy many advantages over fully insured plans. Primarily, self-funded plans can be custom-designed to the unique needs and objectives of the employer. This flexibility, along with aggressive cost management solutions, has made self-funding a popular and proven health plan financing solution.