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Why use self funding?

Self-funding is, by far, the largest type of health employee benefits. It sometimes has different marketing names, such as ASO or partially-self-funded, and sometimes the marketing lingo confuses its precise legal status, such as some minimum-premium and experience-rated. However, under law, the cute marketing names fade away, and a plan is either insured…or self-funded. The marketing names confuse statistics of market share, but when applying the strict legal definition of self-funding, our experience says that about 70% – 75% of people in employee benefit health plans are using self-funding. This represents huge growth in the small-to-medium size market of corporations as well as phenomenal growth among state & local government employment and religious organization workers.

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