Self-funded plans are those wherein an employer assumes all insurable risk and pays claims (through a third party administrator). Please keep in mind with fully self- funded plans their is the risk of catastrophic claims.
What is common, and becoming more accessible for smaller employers, is partial self-funding. Partial funding uses an insurance carrier to limit the employer’s overall risk as well as limiting the risk on individual catastrophic claims. This is referred to as a stop loss.
Partially self-funded plans give employers control and flexibility that a fully insured plan cannot.