A self-funded health plan is one in which the employer pays claims directly rather than purchasing insurance, made possible by ERISA's preemption and "deemer" clauses, which prevent states from calling a self-funded plan "insurance" to work around federal preemption.
67% of all covered workers nationally are enrolled in self-funded plans, rising to 80% at firms with 5,000 or more employees, per KFF's 2025 survey. Self-funded employers carry more direct claims exposure than fully-insured employers, which is exactly why an avoided ED visit shows up in their own claims experience almost immediately. Most pair the plan with stop loss insurance, carried by roughly 90% of mid-size self-funded employers.
ERISA, enacted in 1974, set federal standards for employer-sponsored benefit plans and allowed large employers to self-fund by paying claims directly, preempting state insurance regulations through its "deemer clause."
67% of covered workers nationally are in self-funded plans as of 2025, rising to 80% at firms with 5,000 or more employees, per KFF's Employer Health Benefits Survey.
Many do, but typically through an ASO (Administrative Services Only) arrangement for claims processing and network access, or through stop loss insurance to cap catastrophic claims exposure, not to transfer the core claims risk itself.
Every term here points to the same gap in healthcare access. See how the CareStation closes it.
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