Self-Funded Insurance: An Innovative Approach to Employer- Provided Healthcare
Reducing Costs and Improving Care Outcomes with
Optimized Plan Designs
A Modern Alternative to Traditional Funding
Self-Insurance: A Smarter Way to Support Your Workforce
Looking for a way to contain growing healthcare costs without compromising the quality of employee benefits packages?
Self-funded insurance, or self-insurance, is the solution.
An increasingly popular alternative to traditional, fully insured plans, self-funding your organization’s health insurance gives you greater control over your plan, allowing you to reduce your overall spend and deliver smarter, better, faster healthcare to your employees.
And Vālenz Health® is the perfect partner to help you make it happen.
Reimagining Employer-Provided Healthcare
What is Self-Funding?
Self-funded healthcare insurance is a health plan option in which an employer takes on most or all of the costs of benefits claims. While a third-party administrator (TPA) manages the claims process, the employer holds ultimate responsibility for all related plan and claims costs.
Typically, these costs are paid out of a designated fund that an employer sets aside at the beginning of the plan period. Employers work with plan designers to anticipate and proactively reduce these yearly expenses, using stop-loss insurance to protect themselves further from unexpected, high-claim employee costs.
Optimizing for Smarter, Better, Faster Healthcare
Benefits of Self-Funded Health Plans
In the face of ever-rising healthcare costs, many employers have embraced self-funding as a popular alternative to traditional, fully funded plans.
The main reasons: Self-funding offers a more affordable, more flexible approach to an expensive, complicated benefits ecosystem.
On average, today's employers are projected to pay more than $16,000 per employee in annual healthcare costs. Self-funding allows employers to better optimize that spend, minimizing extraneous costs and protecting their investment in their employee benefits packages.
When you self-fund your insurance plan, you only pay for the healthcare needs of your own employees. Your anticipated annual costs are set aside in a fund, which pays out to cover your employee health expenses as needed over the year. If, by the end of the fiscal year, the claims paid out is less than the premiums paid in, any leftover funds go directly back to you.
Data-driven stop-loss underwriting can protect you from unexpected, high-claims employee costs, further reducing your financial risk as a self-funded employer.
An added bonus: In most states, no premium tax is applied to claims funded directly by employers—meaning more money back in your pocket.
Self-funded healthcare insurance allows you to create optimized, tailored plans that better meet your unique business goals and employees’ needs—a crucial necessity when American employers are wasting more than $3 trillion each year on benefits packages that their own employees do not fully understand.
In contrast to traditional "one-size-fits-all" healthcare plans, self-funded plans are designed to emphasize transparency, flexibility, and cost controls, without compromising high-value care for employees.
With their unparalleled access to data, self-insurance plan designers identify where your healthcare spend is going and which benefits are being used by your employees. In turn, this data informs a plan design that’s highly optimized for your needs—supporting members with the benefits they actually want while reducing wasted employer costs.
Build a better benefits package with Valenz by contacting us today.
A Tale of Two Plan Designs
Self-Funded vs. Fully Insured Health Plans
Self-insured healthcare plans have been steadily rising in popularity the last few decades, covering a record-high 67% of U.S. workers in 2020.
It’s no wonder as to why: The benefits of self-insurance can be significant when compared to traditional healthcare plans, especially for larger firms.
- In-house
- By a TPA
- By an integrated carrier
- Fewer employee claims mean lower employer payments.
- More/higher-cost claims mean higher payments.
Deciding What's Right for You
Are You a Good Candidate for Self-Funding?
While self-funded insurance is a popular option for many employers, it’s not the perfect fit for every organization.
Your transition to a self-funded insurance model is more likely to succeed if:
You have a strong financial foundation, supported by consistent and dependable cash flow:
Because of the variation in monthly claims costs, employers must be financially stable enough to sustain fluctuating expenses from month to month.
Your current healthcare plan has high employee participation and a stable claims experience:
The more engaged and consistent your employees are with their health insurance usage, the more valuable a tailored, self-funded benefits package will be for them.
You are prepared to actively manage your benefits solution:
While self-funding can significantly reduce your costs, it does require active, continuous employer engagement to build a long-term strategy that benefits all parties involved.
Improving Care Outcomes and Containing Healthcare Costs
Self-Funding Your Insurance with Vālenz Health®
As the platform to simplify healthcare, Valenz is your solution for smarter self-funding that reduces costs, improves care outcomes, and elevates the healthcare experience for all involved.
With our fully integrated platform of innovative solutions, we execute across the entire patient journey from member experience to payment integrity, provider quality, and plan performance.
Through services such as comprehensive bill review, cost-savings repricing solutions, and unparalleled data transparency, we take the self-funding work off your shoulders to deliver smarter, better, faster healthcare for your employee workforce.
Learn more about self-funding and whether it’s right for your organization by speaking with a Valenz team member today.
Ready to Simplify Self-Insurance?
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