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Introduction to Self-Funding

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Introduction to Self-Funding

Switching from a fully-insured plan to a self-funded plan has the potential to create huge savings for an employer. Here are some basics facts about self-funding to help you determine whether you should give self-funding a try.


What is Self-Funding?


According to the Kaiser Family Foundation, a Self-Funded Plan is an insurance arrangement in which the employer assumes direct financial responsibility for the costs of enrollees’ medical claims. Employers sponsoring self-funded plans typically contract with a third-party administrator or insurer to provide administrative services for the self-funded plan. In some cases, the employer may buy stop-loss coverage from an insurer to protect the employer against very large claims.

The next articles provide more information about the advantages of self-funding and how you can learn more.


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