Funding models
Self-funded (self-insured) plan
A plan where the employer pays claims directly as they occur, rather than paying a carrier a fixed premium. Employer holds claims risk. Typically uses a third-party administrator (TPA) to process claims and stop-loss insurance to cap catastrophic exposure. Common in companies with 100+ employees.Last reviewed: · TMRW Benefits is a benefits brokerage, not a tax or legal advisor. Consult a CPA or attorney for situation-specific guidance.
Related terms
Fully-insured plan
Carrier takes claims risk. Fixed premium.
Read definitionStop-loss insurance
Caps employer exposure on catastrophic claims.
Read definitionTPA (Third-Party Administrator)
Processes claims for self-funded plans. Not a carrier.
Read definitionLevel-funded plan
Hybrid self-funded with stop-loss. Year-end refund possible.
Read definitionMore in Funding models
Fully-insured plan
Carrier takes claims risk. Fixed premium.
Level-funded plan
Hybrid self-funded with stop-loss. Year-end refund possible.
Stop-loss insurance
Caps employer exposure on catastrophic claims.
Specific stop-loss
Caps individual-claimant exposure.
Aggregate stop-loss
Caps total annual group claims.
MEWA (Multiple Employer Welfare Arrangement)
Health plan covering employees of multiple unrelated employers.
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