Self-funding gives employers a more direct role in financing employee healthcare. Instead of paying an insurance company a premium to assume the claims risk, the employer funds covered claims under its own health plan.
Universal Benefit Plans helps employers evaluate whether the potential flexibility and savings justify the financial risk and administrative responsibilities.
A self-funded arrangement typically includes:
In a traditional self-funded arrangement, claims spending can vary significantly from month to month. Employers need sufficient funds to meet those obligations, including any timing gap before stop-loss reimbursement.
Evaluating self-funding begins with understanding your workforce, claims information when available, budget and ability to absorb financial fluctuations.
The review should include expected annual costs, potential financial exposure, administrative fees, prescription arrangements, provider networks and stop-loss coverage.
Employers should also plan for ongoing oversight, annual renewal reviews and claims that may be processed after the plan year ends or the arrangement terminates.
Self-funding may suit employers with stable finances, sufficient cash reserves and a willingness to take a more active role in managing their health benefits.
Group size and claims history matter, but they are only part of the decision. We help you assess the full financial picture and compare available alternatives.
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