Self funded plans are often used in larger companies, usually companies with 100 employees or more. Self funded basically means the company will purchase a large deductible plan from an insurance company and the company will be responsible for any claims that fall under that large deductible plan. These plans do not make much sense for smaller companies because there are not enough employees to spread the risk and small companies usually do not have the means to handle those large claims.
Most self funded employer plans are subject to ERISA rules and bypass most state regulations.
Self funded plans have been popular for many years, mostly among "jumbo" groups. But several stop loss carriers will issue specific and aggregate coverage on groups as small as 25 employees.
Due to Obamacare constraints, several carriers and TPA's are creating plans that can cover smaller employer groups with 5 - 10 employees.
When properly insured with spec and agg cover and solid financial underwriting, it is indeed possible to provide self funded coverage to smaller groups.
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Self funded plans have been popular for many years, mostly among "jumbo" groups. But several stop loss carriers will issue specific and aggregate coverage on groups as small as 25 employees.
Due to Obamacare constraints, several carriers and TPA's are creating plans that can cover smaller employer groups with 5 - 10 employees.
When properly insured with spec and agg cover and solid financial underwriting, it is indeed possible to provide self funded coverage to smaller groups.