An employer assumes the responsibility for financing the company's benefit plan, instead of giving money to a traditional insurance company. Typically, the employer pays claim expenses up to certain amounts. If expenses exceed these amounts, a stoploss insurer reimburses the employer for excess covered claims. A third party in this arrangement is the administrator, who takes care of the administrative tasks, such as paying claims, customer service, plan accounting and other needs. (This generally applies to companies with fewer than 1000 employees.)

• Just like fully-funded plans, you choose from several conveniently packaged employee benefit plan options. You pay a single, monthly bill that combines the plan administration fee, stoploss insurance premium, as well as the amount needed to fund expected claims. If your group continues to qualify, your total bill will likely be less than the premium for a comparable fully-funded plan.
• With your payment made, funds are deposited into a special bank account used to pay expected claims. The administrator pays employee health claims on your behalf from this account.
• Amounts not used for claims accumulate in the account. You can withdraw the surplus or use it to reduce the monthly amount needed for expected claims in the next year.

• Self-funding can be financially advantageous if your small business claim expenses are at or below the norm among groups who purchase conventional insurance (fully-funded). However, if your small business has members who develop serious, on-going health conditions, fully-funded coverage may be the better alternative. No matter what, Colorado guarantees small business coverage under a fully-funded plan*. *for details, call our office at 303.422.1660

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