What is Self-funding?
A Self-funded (or Self-insured) health plan is one in which the employer assumes some or all of the risk on a health plan for their employees. Re-insurance (or Stop Loss) is usually purchased to protect the plan from both an individual catastrophic claims as well as group aggregate claims.
Self-funded employers pay only for claims they actually incur instead of paying high pre-determined premiums to an insurance carrier. This allows for flexibility and profit as the monthly premium, minus any claims paid, remains with the employer.
Self-funding is an alternative that enables employers to control the rising healthcare costs.