Self-Funded Health Insurance == Good? Bad? Both?

Post date: 2025-05-10 11:22:29

I'm in the US. My employer just started open enrollment for the year. Our health insurance is changing from a normal carrier (UHC) to a self-funded one, in a captive model (if that's the correct way to put that)—basically, pooling money/coverage with a bunch of other companies to spread the risk around a bit (over like 10,000 employees, total). Everyone's kind of freaking out about this (in a bad way)... Should we be?

This is not a large company... All told, maybe 70 employees. The cost of all the plans is going up (essentially doubling), but they're keeping the deductible and OOP max the same for the three options (the most expensive plan is $5000/7900, which... I know isn't great). I think the costs probably would have gone up regardless, just because UHC is terrible, and *waves hand* everything in general. And they did say they started down this path because UHC's plan costs were increasing significantly (as in, reducing yearly profit by over 1/3).

This is the largest company I've worked for. And the only one I've worked for that even offered healthcare. So this is all kind of outside my wheelhouse... Is self-funding a terrible idea? Or is this just like... a normal thing for companies to do? The company isn't in financial trouble, as far as I know—we do a weekly financial overview, and we're profitable every month. This just feels... weird and worrying.

(And looking at the healthcare marketplace, I would need to pay at least double what this plan would cost me to go elsewhere, which might just barely be doable. To get a lower deductible, it's even higher than that—triple or quadruple the cost, which is absolutely not happening at the moment.)

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