Myth vs. Reality: What employers should know about self-funding

Common misconceptions and the facts you need to make informed decisions.

Self-funded health plans have long been seen as an option for only the largest employers. Times have changed, and today’s employers have more options than ever before. Employer groups of many sizes are making the move to self-funded coverage to gain more control, flexibility and insight into their health care spending.

Misconceptions about self-funded plans still exist, particularly for small- and mid-sized employers. Let’s break down some of the most common myths about self-funding and look at the realities, so you can make an informed decision for your business.

Over 60% of U.S. workers with employer-sponsored insurance are now in self-funded plans.¹

Myth #1: Self-funding is only for big companies.

Reality: Thanks to innovations in stop-loss coverage and better data, even mid-size and smaller employers can now consider self-funding. It offers the potential for savings and more flexibility than a fully-insured plan.

Myth #2: Self-funded plans are too risky.

Reality: The risk is real, but it’s also manageable. With self-funding, employers pay their employees’ health care claims, but they don't do it blindly or alone. Stop-loss insurance protects your business from high-cost claims and unexpected spikes in usage.

• Individual Stop-Loss: Caps what you’ll pay for a single individual’s claims.
• Aggregate Stop-Loss: Caps your total claims exposure across your employee population.

With these safeguards, your financial risk is limited and more predictable.

Myth #3: You’ll have to manage everything yourself.

Reality: You don’t have to go it alone — and you shouldn’t. While self-funding means taking a more active role, you’re not left with the heavy lifting. When you partner with Blue Cross and Blue Shield of Kansas, you’re backed by a local team that handles:

• Claims processing and adjudication
• Compliance and regulatory reporting
• Member services and care coordination
• Data and reporting tools to help you make smart decisions

We take care of the logistics, so you can focus on running your business while still having more insight and influence over your plan.

Myth #4: It’s hard to know if self-funding is the right fit.

Reality: BCBSKS can help you assess if self-funding is the right choice. Groups that tend to succeed with self-funding often share traits like:

• A stable or moderately healthy workforce
• Low employee turnover
• Predictable claims trends

BCBSKS provides data analysis and expert guidance to help you understand your group’s risk profile and project potential costs, so you can make the decision with confidence, not guesswork.

Ready to explore the possibilities?

Your BCBSKS representative can walk you through the numbers, evaluate your group’s risk profile and help you decide if self-funding is the right move for your business.