One of the most consequential decisions your company will make — explained clearly.
What Is a Fully Insured Health Plan?
With a fully insured plan, your company pays a fixed monthly premium to an insurance carrier. The carrier assumes all financial risk for claims. At the end of the year, regardless of how healthy or sick your workforce was, you pay the same rate — and the carrier keeps any unused premium.
Pros: Predictable cost, carrier assumes risk, minimal administrative burden.
Cons: No transparency into claims, no refund for healthy years, higher long-run cost for most groups.
What Is a Self-Funded Health Plan?
With a self-funded (self-insured) plan, your company pays claims directly as they occur. You pay a Third Party Administrator (TPA) to process claims, and you purchase stop-loss insurance to cap your exposure — both per individual (specific stop-loss) and in total (aggregate stop-loss).
Pros: Full claims visibility, potential for significant savings (15–30%), surplus stays with employer.
Cons: Variable monthly cost, requires stop-loss insurance, more administrative involvement.
The Key Differences at a Glance
| Fully Insured | Self-Funded | |
|---|---|---|
| Monthly cost | Fixed | Variable |
| Claims visibility | None | Full |
| Unused premium | Kept by carrier | Stays with employer |
| Risk protection | Carrier | Stop-loss insurance |
| Typical group size | Any | 50+ lives recommended |
| Savings potential | Limited | 15–30% for right groups |
What Is Level-Funded? (The Middle Ground)
Level-funded plans give employers predictable monthly payments (like fully insured) while retaining some self-funded benefits — including potential surplus refunds and claims reporting. They're an ideal entry point for groups with 10–200 enrolled lives.
Calculate Your Savings
Enter three numbers and see what your health plan is actually costing you — takes 30 seconds, no documents needed.
Which Is Right for Your Louisiana Business?
Self-funding works best for groups with 50+ enrolled lives, stable or improving claims history, and an appetite for transparency. Level-funded suits smaller groups or those making their first move away from fully insured. Fully insured remains the right fit for very small groups or those with high-risk populations.
Not sure which category your group falls into? Run our free plan diagnostic — it takes 10 minutes and gives you a clear answer.