Direct answer
It depends on your company’s risk tolerance and cash flow, as self-funding requires the employer to pay for claims directly rather than paying a fixed premium to an insurer. It is often risky for small businesses with fewer than 50 employees due to the potential for high, unpredictable medical claims that can exceed budget reserves.
Internal analysis based on standard actuarial risk assessment models for small group health plans. For additional information about how employers structure their coverage, see the Kaiser Family Foundation’s annual Employer Health Benefits Survey.
What this means for you
It depends on your company’s risk tolerance and cash flow, as self-funding requires the employer to pay for claims directly rather than paying a fixed premium to an insurer. It is often risky for small businesses with fewer than 50 employees due to the potential for high, unpredictable medical claims that can exceed budget reserves.
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