What are the advantages of self-funding?

FULLY INSUREDSELF-FUNDED
RiskInsurerEmployer, but can be controlled with Stop Loss insurance
ClaimsPaid by insurerPaid by employer
DataNot readily availableMonthly reporting shows where claim dollars are going
Ability to manage riskLimitedCan identify and manage cost drivers
Cash flowPre-pay premium each monthPay for claims only when they occur
Plan designLimited; controlled by insurerFlexible; controlled by employer
Regulatory oversightStateFederal
State-mandated benefitsYesMostly eliminated
Consistency across state linesNoYes; can have one plan design for employees in multiple states
Premium taxes1.5% to 3.5%, depending on stateLower; based only on Stop Loss premium
Time requirementLow to mediumHigher administrative responsibility
OutlookShort term; year-to-yearLong term

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Insurance coverage is underwritten by Berkley Life and Health Insurance Company and/or StarNet Insurance Company, both member companies of W. R. Berkley Corporation and both rated A+ (Superior) by A.M. Best. Not all products and services may be available in all jurisdictions, and the coverage provided is subject to the actual terms and conditions of the policies issued. Payment of claims under any insurance policy issued will only be made in full compliance with all United States economic or trade and sanction laws or regulation, including, but not limited to, sanctions, laws and regulations administered and enforced by the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”).

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