Self-Funded Health Plans
A Self-Funded (or Self-Insured) health plan allows employers to assume direct financial responsibility for employee healthcare claims instead of paying fixed premiums to an insurance carrier.
Under this model, the employer pays for claims as they occur and typically works with a Third-Party Administrator (TPA) to manage claims processing, compliance, and reporting.
How It Works
- ✓ The employer sets aside funds to cover expected claims.
- ✓ A TPA administers claims and handles compliance requirements.
- ✓ Stop-loss insurance is purchased to protect against catastrophic claims.
- ✓ Employers gain access to real-time claims data and cost transparency.
Key Advantages
- ✔ Greater control over plan design
- ✔ Increased transparency
- ✔ Potential cost savings
- ✔ Flexibility to customize benefits
Is It Right for Your Organization?
Self-funded plans are typically best suited for mid-sized to large employers who want greater control and long-term cost management strategies.