How Does A Self-Funded Health Insurance Plan Work? 
How does a self funded health insurance plan work ? For the employee or plan participant , there is absolutely no difference in how a self funded plan and a regular health plan . The difference is behind the scenes . A self funded plan does not pay a premium to an insurance company for benefits , instead the funds are kept in house . The company may hire a third party administer to handle claims , but costs are picked up by the employer . Most companies that self insure also pay for `` stoploss '' insurance , which is a high deductible plan that kicks to pay claims for a large claim a employee may incur . 