Self-Funding vs. Fully-Insured

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Project Description

A mid-sized construction company with between one to two-hundred employees was seeking to implement a new health care program for its employees. At time of engagement the client was part of a self-funded national industry association utilizing a national PPO network.


The client was seeking alternatives for either fully-insured and/or self-funded plans, which vary significantly in their design requirements.


Employee Benefit Advisors worked with the client to explore all their options based on a careful cost/benefit analysis. Our analysis included a review of key data (e.g. aggregate and individual stop loss, lasering, and claims run out), which provided the roadmap for an innovative plan design that would significantly reduce costs.

Prior to the clients entry into the association plan EBA advised that the national PPO networks used by the self-funded platform did not have the deep discounts offered by the in-state network of the fully-insured local market plans. Once claims hit (claims from all members in the association plan), the association plan passed on significant increases. EBA was then hired to analyze options. Using our extensive expertise in this area, EBA reviewed carrier network discounts to help the client decide to come back into the fully-insured market. For this particular client, which had 100% of its employees working in-state, the national network was an added luxury which represented unnecessary costs.

EBA forecast the downfall of the association plan before the client enrolled its employees. However, the initial savings was so significant, the client opted to roll-the-dice for a self-funded program, even though poor claims might prevent them from reentering the fully-insured market. EBA worked very closely with the client in both implementation and roll-out of the self-funded plan, as well as minimization of risk.


Employee Benefit Advisors pre-underwrote the case to determine the best option moving forward. Our analysis resulted in;

  • Pulling the client out of the association plan and being able to re-enter the local market,
  • Creating a rate structure that was lower than the premiums the group paid 3 years prior,
  • Minimization of risk in the implementation and roll-out of the self-funded plan, and
  • The client saved 40% off their fully-insured renewal options by pre-underwriting.


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