Self Funded plans are governed by ERISA, not the state insurance department, which allows for more plan design flexibility, less mandated coverages, and less taxes than fully insured plans. Self funded plans pay only for the healthcare their members consume, whereas in the fully insured market, rates are set based on the collective claims experience of a much larger pool of employers which may contain thousands of other employer groups.  To mitigate claims risk within self funded plans, most plans are layered with stop loss insurance which provides employers with insurance coverage in the event one of their members incurs catastrophically high claims OR their entire member population incurs higher than average claims.  Many self funded plans can be arranged so that employers pay the same amount every month (easy budgeting) but receive a refund of unused dollars at the end of the year.Read More