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Self Funding

A self-funded employee benefit plan is a benefit arrangement where the employer is responsible for the risk and pays health claims instead of paying an insurance carrier a premium for a group policy. Employers hire a Third Party Administrator (TPA) to set up the plan, adjudicate claims and otherwise administer the plan.

Companies with the following attributes should explore self-funding their employee benefit plan:

  • Over 75 employees enrolled in coverage
  • A growing or stable workforce
  • Consistent cash flow
Advantages of self-funded plans:
  • Employer has control over the plan design
  • Employers participate directly in the plan experience
  • Improved Cash Flow: employers fund as claims are paid rather than prefunding a premium
  • Reserves are held by the employer so they earn interest income on those dollars
  • Lower cost of operation (administrative costs are usually lower)
  • Carrier profit charges are eliminated
  • State mandated benefits are eliminated, if desired
  • State premium tax is avoided
Employees and dependents receive ID cards to present to their health care providers and pharmacies and their coverage is just as easily recognized as a fully-insured plan from the carriers.

Stop loss coverage is a very important piece of a self-funded employee benefit plan. This coverage provides protection for the employer against large claims over a predetermined threshold and can include medical claims or medical and pharmacy claims.

As your TPA, Frates Benefit Administrators will arrange for stop loss coverage, a PPO network, a pharmacy benefit manager for prescription drug processing and all other aspects of your self-funded plan. We have the ability to do an in-depth analysis of your current plan and accurately forecast the total cost of adopting a self-funded plan.

Looking for more information? We can help! Get in Touch

Contact Us
  • Address: 3817 NW Expressway, Suite 810
    Oklahoma City, OK 73112
  • Phone: 800-850-7166
  • Email:
  • Monday - Friday: 8am to 5pm Central | Saturday - Sunday: Closed
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