Self-Funded Group Health Plans in Ohio

In a self-funded (or self-insured) health plan, an Ohio employer bears the financial risk of paying employee medical claims directly rather than purchasing coverage from a carrier. Self-funding is the dominant model for large Ohio employers and is increasingly accessible to mid-size groups through modern third-party administrators (TPAs) and stop-loss insurance.

The Core Components of a Self-Funded Plan

• Third-Party Administrator (TPA): processes and pays claims, provides ID cards, EOBs, and member services, and gives you network access (often an Anthem, Medical Mutual, Aetna, or UHC network).
• Stop-Loss Insurance: a separate policy that reimburses claims above set thresholds. Specific stop-loss covers individual catastrophic claimants; aggregate stop-loss caps total annual exposure.
• Pharmacy Benefit Manager (PBM): manages the drug formulary and can deliver pass-through, transparent pricing.
• Provider Network: discounted rates licensed from a major carrier or a regional Ohio network.

Advantages of Self-Funding for Ohio Employers

Advantage	Detail
Full claims data visibility	You own your data and can target cost drivers and wellness ROI.
Custom plan design	Set your own deductibles, copays, networks, and covered services under ERISA.
No state premium tax	Self-funded plans avoid the Ohio premium tax applied to fully insured premiums.
Surplus retention	Unused claim reserves stay with the employer in a healthy year.

Managing the Risks

The primary risk of self-funding is cash-flow variability from catastrophic claims. This is mitigated with an appropriate specific stop-loss attachment point (commonly $50,000–$250,000), aggregate stop-loss at roughly 125% of expected claims, adequate monthly reserves, and utilization management. Self-funded plans also require more administration — Form 5500 filing, an ERISA plan document, and stop-loss reconciliation — which we help coordinate.

Explore Other Ohio Group Plan Types

Frequently Asked Questions

What is a self-funded health plan?

In a self-funded (self-insured) plan the employer pays employee medical claims directly from company funds rather than paying premiums to a carrier. A third-party administrator processes claims and stop-loss insurance caps the employer’s risk. Most large Ohio employers self-fund.

How does ERISA affect self-funded Ohio plans?

Self-funded plans are governed by the federal ERISA law, which preempts most Ohio state insurance mandates. This lets employers design custom benefits, though many keep key mandated benefits for competitiveness.

What group size can self-fund in Ohio?

Self-funding is traditionally used by employers with 100+ employees, but modern third-party administrators and stop-loss make it accessible to Ohio groups as small as 50–75 employees.

How is employer risk controlled?

Two layers of stop-loss insurance: specific stop-loss reimburses claims above a per-person threshold, and aggregate stop-loss caps total annual plan claims, typically around 125% of expected costs.