Is self-funding for everybody?
No. The major difference between an insured plan and a self-funded one is that in self-funding the employer assumes the risk for the claims and these claims should be somewhat predictable. Therefore, if the employer is very small, self-funding is not recommended. Although there are companies as small as 25 employees that so successfully self-fund their health plans, an employer this size should consult us as to the viability of self-funding. Also, if the work force is volatile making future claims difficult to predict, self-funding may not be an option. Volatility of future claims can be smoothed out to a great extent by the purchase of excess-risk coverage. Please consult with us for more information as we are happy to share more insight and experiences.
