Employee Benefits

Self-Funded Health Plans

Full claims transparency, maximum plan design flexibility, and potential for significant cost savings for employers with 75+ employees and the risk management infrastructure to support self-insurance.

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Fully Insured Level-Funded Self-Funded Ancillary & Voluntary
For CFOs and HR Leaders

Self-funding: maximum control, maximum responsibility

In a self-funded (self-insured) arrangement, the employer assumes direct financial responsibility for employee health claims, paying them as they occur rather than paying a fixed insurance premium. A third-party administrator (TPA) handles claims processing and provides network access.

Self-funding is the structure used by large corporations for good reason: full data transparency, no insurance company markup, plan design that doesn't have to comply with state-mandated benefits, and the ability to tailor wellness and disease management programs to your actual workforce.

The self-funded financial model

Claims Reserve FundEmployer funds a reserve account; claims are paid directly from this fund as incurred
Specific Stop-LossProtects against any single member's claims exceeding a per-person threshold in a plan year
Aggregate Stop-LossCaps total group claims at a percentage of expected; prevents catastrophic total-group exposure
TPA / Administrative FeesClaims processing, utilization management, network access; typically paid as a per-employee-per-month (PEPM) fee

Key advantages for growing businesses

  • ✓Full claims transparency: Individual-level claims data (de-identified as required by HIPAA) allows targeted wellness programs and plan design refinements.
  • ✓ERISA preemption of state mandates: Self-funded plans governed by ERISA are not subject to state-mandated benefit requirements, giving employers more plan design control.
  • ✓No insurance company profit margin: In years when claims run well, the employer keeps the savings rather than the carrier.
  • ✓Custom plan design: Deductibles, networks, drug formularies, and benefit structures can be tailored to your workforce in ways not available under fully insured plans.

Best fit for self-funding

  • 75+ employees
  • Stable, predictable workforce
  • No recent catastrophic claimants
  • Cash reserves to absorb claims timing
  • HR/finance capacity to manage plan
  • Appetite for claims data and plan management

Get a self-funded analysis

We'll model a self-funded scenario, with proper stop-loss, alongside your current structure so the CFO and HR leader can evaluate it together.

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Self-funded health plans: The CFO's guide to cost predictability

With proper stop-loss structure and claims data, self-funding can be the most cost-efficient and transparent benefits structure available to growing Texas businesses.

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Content on this page is for general educational purposes only and does not constitute legal, tax, or ERISA advice. Self-funded plan structures involve significant financial and compliance considerations. Employers should work with a licensed insurance professional and qualified ERISA counsel before establishing or modifying a self-funded plan. Individual results vary based on group size, demographics, claims experience, and stop-loss structure.