Self-Insuring is a great way to reduce the cost of a group benefits plan and can work well for organizations that expect a predictable claims experience.
To the employer and employees, a self-insured plan functions exactly the same as an insured plan with only one big difference: The employer is only paying for “claims” that have actually been incurred by the employee group plus a small administration fee that is paid to a third party administrator for adjudicating the claims. The potential cost savings can be substantial!