A self-funded employer pays claims directly out of its own funds, which under ERISA preempts most state insurance regulations but creates direct exposure to claims volatility, usually managed with stop loss insurance. A fully insured employer instead pays a fixed premium to a carrier, which assumes the claims risk.
KFF's 2025 survey found 67% of covered workers nationally are now enrolled in self-funded plans, including 80% at large firms (5,000-plus workers) versus just 27% at firms with 10 to 199 workers. Self-funded employers are the priority segment for on-site care solutions because they see the ROI of avoided claims immediately and directly, rather than through a premium renegotiation a year later.
67% of covered workers nationally are enrolled in self-funded plans as of 2025, including 80% at firms with 5,000 or more workers, per KFF's Employer Health Benefits Survey.
No. Self-funded plans are governed primarily by ERISA, which preempts most state insurance regulations that apply to fully insured plans.
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