Self-funding is an alternate, affordable way for you to provide quality
health care benefits for your employees. When you decide to self-fund,
you, in essence, become an insurance company, and at that point must be
willing and able to financially and conceptually assume the risk that
is normally carried by an insurance company.
When you establish a self-funded medical plan, you also assume the responsibility
to provide the administrative functions of the plan—utilization
review, claims adjudication, claims auditing and reports. A third-party
administrator (TPA) is usually selected to provide these administrative
As a self-funded employer, you are actively involved in the plan design
and have control over the use of benefits.