This paper examines self-funding for employer-sponsored health insurance, contrasting it with fully insured plans. While fully insured models offer predictability, self-funding provides flexibility, customization, and potential cost savings by avoiding insurer profit margins, but shifts greater financial risk to the employer. The brief outlines key factors for consideration—financial readiness, group size, internal capacity, organizational fit, and communication—while emphasizing the role of third-party administrators, stop-loss insurance, and ongoing monitoring. With thoughtful planning and oversight, employers can achieve both cost control and long-term sustainability, setting the stage for future discussions on advanced funding strategies and risk management.
