Self-Funded Health Plans

Keep the Carrier's Profit Margin

Most employers overpay for health benefits — not because self-funding is hard, but because they've never had a guide who actually specializes in it.

Your Self-Funding Guide

Phillips Financial is your guide to self-funded healthcare. We bring the structure, the vendor relationships, and the transparency most brokers simply don't offer.

Phillips Financial is a boutique benefits agency built around self-funding. We know the structure, the risk, the vendor ecosystem, and the compliance obligations — and we bring that expertise directly to you, with all fee cards face up and no conflicts of interest.

Most brokers sell fully insured plans because they're easy. Self-funding takes expertise. That's our specialty.

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Spend 20–34% Less

Potential reduction in total healthcare spend vs. fully insured plans

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Prescription Costs Reduced

20–30% prescription cost reduction through transparent PBM partnerships

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100% Transparency

Visibility into your own claims data — a right you don't have in a fully insured plan

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ERISA Compliance

Self-funded plans operate under federal law, exempt from many state insurance mandates

The Basics

What is self-funding, and is it right for you?

In a self-funded plan, your company pays employee health claims directly — rather than paying a fixed premium to an insurance carrier. The result: you keep unused premiums, you own your claims data, and you design benefits around your workforce, not a carrier's standard menu.

You Fund the Claims

Instead of paying a carrier's premium (which includes their admin costs, profit margin, and state premium tax), you set aside funds to pay actual medical claims as they occur — keeping any surplus at year-end.

Stop-Loss Caps Your Risk

Stop-loss insurance protects you from catastrophic claims — both individual high-cost cases (specific stop-loss) and unusually high total claims across your workforce (aggregate stop-loss). Risk is controlled, not eliminated.

Vendors Execute the Plan

A curated vendor stack — TPA, PBM, network, care management — handles day-to-day administration. Phillips Financial selects, negotiates, and monitors each partner so the whole system works together seamlessly.

The Building Blocks

Every component of a well-built self-funded plan

A self-funded plan is only as strong as its parts. Phillips Financial designs and manages each layer — so nothing falls through the cracks.

Stop-Loss Insurance

Your financial safety net against catastrophic claims

Stop-loss insurance is the cornerstone of every self-funded plan. It reimburses your company when claims exceed predetermined thresholds — protecting you from the financial impact of a single catastrophic diagnosis or an unexpectedly high-claims year across your entire workforce.

Without stop-loss, self-funding is speculation. With the right stop-loss structure, it's strategy. Phillips Financial shops the stop-loss market on your behalf, benchmarks attachment points against your claims history, and negotiates terms that balance premium cost against meaningful protection — including traditional individual carrier markets, captives, and employer consortiums.

Third-Party Administrator (TPA)

The operational engine of your self-funded plan

Your TPA is the day-to-day administrator of your health plan — processing claims, managing plan documents, fielding employee questions, and producing the data reports that make cost-containment possible. Choosing the right TPA is one of the most consequential decisions in a self-funded strategy.

Phillips Financial maintains relationships with leading TPAs and selects partners based on claims processing accuracy, reporting transparency, customer service responsiveness, and fee structure — not on referral arrangements. We hold TPAs accountable throughout the year, not just at renewal.

Pharmacy Benefit Management (PBM)

Prescription costs are rising 9–11% annually — your PBM strategy is make-or-break

Prescription drugs now represent approximately 18% of total healthcare spending, with costs growing 10%+ annually. For self-funded employers, pharmacy cost management is one of the highest-leverage tools available. The difference between a traditional PBM and a transparent PBM can represent 20–30% savings on your total pharmacy spend.

Traditional PBMs under fully insured plans are notorious for "ingredient cost spread" — charging you more than they pay the pharmacy and pocketing the difference. In a transparent PBM arrangement, all rebates flow back to the plan, fees are disclosed, and you can audit every claim. Phillips Financial only recommends PBMs with transparent, pass-through pricing models.

Network Strategy & Provider Access

The right network drives quality, access, and cost — simultaneously

Self-funded plans have far more flexibility in network design than fully insured plans. Rather than accepting a carrier's pre-packaged network, you can layer best-in-class networks, reference-based pricing arrangements, and direct provider contracts to optimize both access and cost.

The network is where most of your claims dollars are actually paid. A well-designed network strategy can reduce unit costs on medical claims by 15–25% through better reimbursement rates, centers of excellence for high-cost procedures, and reference-based pricing for facility claims.

Compliance & Fiduciary Obligations

Self-funded plans carry real legal responsibilities — we keep you protected

Self-funded plans are governed by federal law under ERISA — which means you, as the plan sponsor, take on fiduciary responsibility. That's a legal duty to act in the best interest of plan participants. Most employers don't fully understand the compliance obligations that come with self-funding. We make sure you do.

The regulatory landscape has grown significantly more complex since the Consolidated Appropriations Act (CAA) of 2021 introduced new transparency, reporting, and mental health parity requirements. Phillips Financial monitors these obligations, works with your TPA to fulfill them, and ensures you're never caught off guard by a regulatory change.

Data Analytics & Claims Intelligence

You can't manage what you can't see — full claims transparency is your competitive advantage

One of the most underutilized advantages of self-funding is complete claims data ownership. In a fully insured plan, your carrier owns that data and is under no obligation to share it. In a self-funded plan, you see every claim, every cost driver, every utilization pattern — which means you can actually do something about them.

Phillips Financial reviews your claims data quarterly, identifies emerging cost trends before they compound, and uses that intelligence to inform plan design adjustments, wellness program targeting, and stop-loss renewal strategy. This data-driven approach is what separates a well-managed self-funded plan from an unmanaged one.

Care Management & Cost Containment

Proactive health management keeps people well and claims low

The best claims are the ones that never happen. Care management programs — from nurse hotlines and chronic disease management to second opinion services and transplant centers of excellence — are proven tools for improving health outcomes and reducing the frequency and severity of high-cost claims.

In a self-funded plan, every dollar saved on a preventable complication goes directly back to your bottom line. We build care management into your plan design from the start, not as an afterthought.

Ready to find out if self-funding is right for your business?

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