BART
Funding Strategy Calculator

Self-Funded vs Fully-Insured Calculator

Compare self-funded, level-funded, and fully-insured health plan options. Determine which funding approach is right for your client with break-even analysis and risk assessment.

Compare Funding Approaches

Fully-Insured

Traditional insurance where carrier assumes all risk

Advantages

  • +Predictable costs
  • +No claims risk
  • +Simpler administration
  • +State-regulated protections

Disadvantages

  • -Higher premiums
  • -Less flexibility
  • -No claim refunds
  • -Limited plan customization
Best For
Small groups (<50), risk-averse employers, limited HR resources

Level-Funded

Hybrid with fixed payments and potential refunds

Advantages

  • +Predictable monthly costs
  • +Potential surplus refunds
  • +Claims data access
  • +Some plan flexibility

Disadvantages

  • -May pay more if claims are high
  • -Stop-loss costs
  • -Less customization than ASO
  • -Still some risk
Best For
Healthy groups 25-200 employees, seeking savings with protection

Self-Funded (ASO)

Employer pays claims directly with TPA administration

Advantages

  • +Lowest costs if claims are low
  • +Full plan customization
  • +Complete claims data
  • +ERISA preemption

Disadvantages

  • -Variable costs
  • -Claims risk
  • -Administrative complexity
  • -Cash flow requirements
Best For
Large groups (100+), healthy populations, sophisticated HR

Decision Matrix

FactorFully-InsuredLevel-FundedSelf-Funded
Group SizeFully-InsuredLevel-FundedSelf-Funded
Risk ToleranceFully-InsuredLevel-FundedSelf-Funded
Cash ReservesFully-InsuredLevel-FundedSelf-Funded
Claims HistoryHigh claims = FIAverage = LFLow claims = SF
Plan Flexibility NeedLow = FIMedium = LFHigh = SF
HR SophisticationLimited = FIModerate = LFAdvanced = SF

Self-Funded Cost Components

Fixed Costs

  • 1
    Stop-Loss Premiums
    Specific and aggregate coverage
  • 2
    TPA Administration
    Claims processing, network access
  • 3
    Network Access Fees
    PPO network rental costs

Variable Costs

  • 1
    Paid Claims
    Actual medical/Rx claims paid
  • 2
    IBNR Reserve
    Incurred but not reported claims
  • 3
    Run-Out Liability
    Claims from prior plan year

Understanding Stop-Loss Insurance

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Specific Stop-Loss

Protects against high individual claims. Once a single claimant exceeds the specific deductible (e.g., $50,000), stop-loss reimburses the excess.

Example
$75,000 claim with $50,000 specific deductible = Employer pays $50K, stop-loss pays $25K
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Aggregate Stop-Loss

Caps total annual claims. If total claims exceed a predetermined corridor (typically 125% of expected), stop-loss reimburses the excess.

Example
Expected claims $500K, 125% corridor = $625K cap. If claims hit $700K, stop-loss pays $75K

Model Any Funding Scenario

BART lets you compare fully-insured, level-funded, and self-funded options side-by-side with accurate contribution modeling.