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Why the Term “Self-Funded” Shouldn’t Scare You

By December 27, 2021December 30th, 2021Blog, Employee Benefits

People get very scared when they hear the term self-funded.  They think “What if one of my employees has a million dollar claim?”

Self funded plans typically have certain insurance policies in place to protect your organization against those large claims. Those insurance policies are often referred to as stop loss.

Although the terminology is self-funded, it’s actually partially self-funded because you’re only paying for a certain portion of those claims upfront.  Once the employer reaches a certain point of out-of-pocket claim dollars spent, stop-loss kicks in behind the scenes to protect the employer.

Once you figure out how self-funding works, you’ll find that it reduces the volatility of healthcare for many organizations.