Self-Funding Readiness Assessment for Group Health Plans
Self-funding can deliver significant savings—but only when the timing is right. Many brokers face clients eager to reduce costs without understanding the financial risks, administrative demands, or operational requirements that make self-funding successful.
The challenge isn't just analyzing claims data. It's knowing what questions to ask, which red flags to watch for, and how to objectively assess whether a client has the infrastructure and risk tolerance to handle self-funding responsibly.
Our Self-Funding Readiness Assessment evaluates the complete picture: cash flow capacity, claims volatility, administrative infrastructure, and organizational readiness. In 10 minutes, you'll gain clarity on whether your client should proceed, wait, or stay fully-insured.
Understanding Self-Funding: A Quick Guide
Watch this 3-minute video to understand the key factors that determine self-funding readiness.
Want a personalized consultation? Our experts can walk you through the assessment in detail.
Get Your Personalized Readiness Report
Complete our comprehensive assessment to receive detailed results and recommendations. A member of our team will follow up to discuss your specific situation.
Basic Information
What is the group's current health insurance funding model?
What state is the group located in (if multiple, please select headquarters)?
What industry is the company in?
How many employees are currently enrolled in all company-sponsored health plans?
What Your Assessment Might Miss
Even a strong assessment score doesn't tell the complete story. Here's what brokers often overlook when evaluating self-funding readiness:
Cash Flow Timing Risks
Monthly claim volatility can create unexpected shortfalls even when annual budgets look solid. Understanding payment cycles, claim processing timelines, and reserve requirements is critical to avoiding cash crunches.
Administrative Infrastructure
Self-funding requires robust TPA capabilities, internal HR capacity for compliance management, and systems to handle ERISA requirements, COBRA administration, and regulatory reporting. Many organizations underestimate these demands.
Stop-Loss Contract Nuances
Selecting the right specific deductible, understanding aggregate attachment points, and navigating laser provisions can make or break a self-funding program. Poor contract structure exposes clients to unnecessary risk.
Claims Run-Out Liability
Transitioning from fully-insured to self-funded creates financial exposure for claims incurred but not reported. Clients need adequate reserves and clear run-out strategies to avoid unexpected liabilities.
Vendor Network Quality
Success depends on strong partnerships with the right PBM, PPO network, and cost containment vendors. Weak vendor relationships undermine the savings self-funding should deliver.
Real-World Case Studies
Manufacturing Group Saves $180K in Year One
Challenge: A 250-employee manufacturing company faced a 22% premium increase on their fully-insured plan renewal. They had stable claims, strong cash reserves, and experienced HR leadership but had never considered self-funding.
Solution: Our assessment revealed excellent readiness across all categories. We structured a self-funded plan with appropriate stop-loss coverage and connected them with a experienced TPA.
Result: First-year savings of $180,000 with improved plan flexibility. The client maintained $120,000 in surplus reserves and enhanced their wellness programs.
Tech Startup Waits 18 Months, Then Succeeds
Challenge: A fast-growing 120-employee tech startup wanted immediate self-funding to control costs. Our assessment revealed inadequate cash reserves and limited HR infrastructure despite strong growth.
Solution: We recommended waiting 18 months to build reserves, hire dedicated benefits staff, and stabilize their workforce growth. We provided a detailed preparation roadmap.
Result: After following our recommendations, they successfully transitioned to self-funding with $240,000 saved in the first two years and avoided the cash flow problems that derailed a competitor's attempt.
Related Resources
Stop-Loss 101
Comprehensive guide to understanding stop-loss insurance fundamentals.
Download PDFDeductible Optimization Tool
Analyze specific vs. aggregate deductible structures for your clients.
Try This ToolCommon Self-Funding Mistakes
Learn from real-world scenarios where timing and preparation made the difference.
Read MoreQuestions about your assessment results?
Schedule a consultation with Jennifer or another member of our team.
Schedule a Conversation