They pass a portion of that risk to reinsurance companies that specialize in that market. Self insurers do not assume the full risk, either.
Reinsurance is available that limits risk using two different products.
Although there are similarities between worker's compensation and group medical, there are decided differences. We will review worker's compensation first. Aggregate Excess provides protection for the sum of all accidents that occur limited by the amount of each claim and the policy limit of the aggregate coverage. As claims are paid, the amount is charged against the total pot of money. When the cap of the aggregate loss fund is reached, the reinsurer will reimburse for dollars spent beyond, up to the aggregate limit of the policy.