BENEFITS RISK MANAGEMENT
SELF-FUNDING
Christi Group has over 35 years of expertise in build the most sustainable self-funded plans, utilizing best-in-class vendor partners and risk management strategies.
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Self-Funding: A Smarter Alternative
A Better Way to Control Costs
When most people think of a group benefits plan, they picture a traditional fully insured plan. Employers pay a fixed premium, and the insurance carrier takes on the financial risk. But here’s the catch: that premium covers not just the projected claims but also admin costs, reserves, commissions, risk charges, and taxes. It’s expensive—and inflexible.
A self-funded (or self-insured) health plan flips that model. Instead of paying high premiums, the employer takes on the responsibility of paying actual health claims directly—often with the help of a Third-Party Administrator (TPA) who handles claims processing, customer service, and plan management.
With self-funding, you only pay for what your employees actually use. That means better cash flow, lower fixed costs, and greater control over your plan design and vendor partnerships.
Why Choose a Self-Funded Plan?
At Christi, we believe self-funding is the foundation of a sustainable, high-quality health benefits strategy. It's a powerful way to control costs while maintaining competitive benefits that help attract and retain top talent.
KEY ADVANTAGES TO A SELF-FUNDED PLAN:
Lower Fixed Costs:
Administrative fees with TPAs are typically much lower than traditional insurance carrier charges.
Improved Cash Flow:
You keep your funds until claims are incurred, potentially earning interest on reserves instead of prepaying premiums.
Custom Plan Design:
Tailor benefits to meet the unique needs of your workforce—with flexibility to adapt as needs evolve.
Exemption from State Mandates:
Most self-funded plans fall under ERISA, which means you’re not required to comply with every state’s benefit mandates.
Reduced Premium Taxes:
Since you’re not paying insurance premiums on claims, you avoid taxes that can total up to 5% of total plan cost.
Elimination of Carrier Profits:
You remove insurer profit margins on claims, except for any stop-loss insurance coverage purchased.
Greater Control Over Vendors:
Choose the partners that work best for your team—from networks and pharmacy programs to wellness and care management solutions.
KEY COMPONENTS OF A SELF-FUNDED PLAN
Plan Documents & Compliance
Running a self-funded plan means taking care of some documentation, such as:
• Summary Plan Description (SPD) – your blueprint for how the plan operates.
• Form 5500 (if applicable) – for compliance with federal regulations.
• Stop-Loss Contracts – outlining terms of your reinsurance coverage.
It’s not overly complex, but it does require thoughtful planning and strong administration.
Access to Claims Data
One of the biggest benefits of self-funding is access to real-time claims data. This allows you to:
• Identify cost drivers
• Spot high utilization patterns
• Deploy targeted wellness and cost-containment programs
It provides you the data to make smarter decisions that benefit both your bottom line and your employees.
Protecting Your Business with Stop-Loss Insurance
Self-funding doesn’t mean you’re on your own. Stop-loss insurance protects your organization from catastrophic claims and unexpected spikes in expenses.
This safety net keeps your risk manageable—and your business protected.
Addressing Employee Concerns
Change can be intimidating, but self-funding doesn’t mean reduced coverage or greater employee risk. In fact, with stop-loss protection and tailored plan design, employees often enjoy richer benefits, broader access to care, and more support programs than under traditional insurance.
You can also customize offerings like:
• Mental health resources
• Telemedicine
• Value-based care
• Concierge services
It’s all about building a plan that supports your people.
Bottom Line: Smarter Benefits, Better Control
So there you have it—self-funded health plans, demystified. They’re not just for Fortune 500s with deep pockets; they’re a smart, flexible option for businesses of all sizes looking to take control of healthcare costs.
Sure, it’s not a plug-and-play solution. And yes, there’s a learning curve. But with the right partners and a little boldness, self-funding can help you cut costs, improve benefits, and stop dreading those annual premium hikes.
At the end of the day, it’s about making smarter, more strategic choices for your organization and your people.
When most people think of a group benefits plan, they picture a traditional fully insured plan. Employers pay a fixed premium, and the insurance carrier takes on the financial risk. But here’s the catch: that premium covers not just the projected claims but also admin costs, reserves, commissions, risk charges, and taxes. It’s expensive—and inflexible.
A self-funded (or self-insured) health plan flips that model. Instead of paying high premiums, the employer takes on the responsibility of paying actual health claims directly—often with the help of a Third-Party Administrator (TPA) who handles claims processing, customer service, and plan management.
With self-funding, you only pay for what your employees actually use. That means better cash flow, lower fixed costs, and greater control over your plan design and vendor partnerships.
Why Choose a Self-Funded Plan?
At Christi, we believe self-funding is the foundation of a sustainable, high-quality health benefits strategy. It's a powerful way to control costs while maintaining competitive benefits that help attract and retain top talent.
KEY ADVANTAGES TO A SELF-FUNDED PLAN:
Lower Fixed Costs:
Administrative fees with TPAs are typically much lower than traditional insurance carrier charges.
Improved Cash Flow:
You keep your funds until claims are incurred, potentially earning interest on reserves instead of prepaying premiums.
Custom Plan Design:
Tailor benefits to meet the unique needs of your workforce—with flexibility to adapt as needs evolve.
Exemption from State Mandates:
Most self-funded plans fall under ERISA, which means you’re not required to comply with every state’s benefit mandates.
Reduced Premium Taxes:
Since you’re not paying insurance premiums on claims, you avoid taxes that can total up to 5% of total plan cost.
Elimination of Carrier Profits:
You remove insurer profit margins on claims, except for any stop-loss insurance coverage purchased.
Greater Control Over Vendors:
Choose the partners that work best for your team—from networks and pharmacy programs to wellness and care management solutions.
KEY COMPONENTS OF A SELF-FUNDED PLAN
Plan Documents & Compliance
Running a self-funded plan means taking care of some documentation, such as:
• Summary Plan Description (SPD) – your blueprint for how the plan operates.
• Form 5500 (if applicable) – for compliance with federal regulations.
• Stop-Loss Contracts – outlining terms of your reinsurance coverage.
It’s not overly complex, but it does require thoughtful planning and strong administration.
Access to Claims Data
One of the biggest benefits of self-funding is access to real-time claims data. This allows you to:
• Identify cost drivers
• Spot high utilization patterns
• Deploy targeted wellness and cost-containment programs
It provides you the data to make smarter decisions that benefit both your bottom line and your employees.
Protecting Your Business with Stop-Loss Insurance
Self-funding doesn’t mean you’re on your own. Stop-loss insurance protects your organization from catastrophic claims and unexpected spikes in expenses.
This safety net keeps your risk manageable—and your business protected.
Addressing Employee Concerns
Change can be intimidating, but self-funding doesn’t mean reduced coverage or greater employee risk. In fact, with stop-loss protection and tailored plan design, employees often enjoy richer benefits, broader access to care, and more support programs than under traditional insurance.
You can also customize offerings like:
• Mental health resources
• Telemedicine
• Value-based care
• Concierge services
It’s all about building a plan that supports your people.
Bottom Line: Smarter Benefits, Better Control
So there you have it—self-funded health plans, demystified. They’re not just for Fortune 500s with deep pockets; they’re a smart, flexible option for businesses of all sizes looking to take control of healthcare costs.
Sure, it’s not a plug-and-play solution. And yes, there’s a learning curve. But with the right partners and a little boldness, self-funding can help you cut costs, improve benefits, and stop dreading those annual premium hikes.
At the end of the day, it’s about making smarter, more strategic choices for your organization and your people.
