Self-Funding 101 > Cost Comparisons

Cost Comparisons

Cost Comparisons: Fully Insured vs. Partially Self-Funded

A fully insured or traditional product is a fixed cost and no matter how many claims you incur, or don't incur, you pay the same monthly cost. With a partially self-funded product you pay the claims as they are incurred. In the years with "average" to "below average" claims, you reap the savings. In the "bad" years you are protected with stop loss and pay a comparable "fully insured" amount.

A fully insured or traditional product is a fixed cost and no matter how many claims you incur - or don't incur - you pay the same monthly cost. With a partially self-funded product you pay the claims as they are incurred. In the years with "average" to "below average" claims, you reap the savings. In the "bad" years you are protected with stop loss and pay a comparable "fully insured" amount.

Fully Insured Plans

Each year, your premium dollar consists of the following factors:

BMI Cost Comparisons without Self-Funding: Claims, Margin, Reserves, Overhead and Premium Tax

Partially Self-Funded Plans

With split-funding, a larger portion of each dollar expended can go towards claims.

BMI Cost Comparisons with Self-Funding: Claims, Reinsurance Premiums and Administration Fees

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