

Stop Loss
Self-Funding Advantages
FULLY INSURED | SELF-FUNDED | |
---|---|---|
Risk | Insurer | Employer, but can be controlled with Stop Loss insurance |
Claims | Paid by insurer | Paid by employer |
Data | Not readily available | Monthly reporting shows where claim dollars are going |
Ability to manage risk | Limited | Can identify and manage cost drivers |
Cash flow | Pre-pay premium each month | Pay for claims only when they occur |
Plan design | Limited; controlled by insurer | Flexible; controlled by employer |
Regulatory oversight | State | Federal |
State-mandated benefits | Yes | Mostly eliminated |
Consistency across state lines | No | Yes; can have one plan design for employees in multiple states |
Premium taxes | 1.5% to 3.5%, depending on state | Lower; based only on Stop Loss premium |
Time requirement | Low to medium | Higher administrative responsibility |
Outlook | Short term; year-to-year | Long term |