Direct answer
The primary risk is the potential for catastrophic or unpredictable high-dollar claims that exceed the employer’s cash reserves. This risk can be mitigated by purchasing stop-loss insurance, but the employer remains ultimately liable for the primary layer of health care costs.
Industry standards on self-insured employer liability and stop-loss coverage limits. For additional information about employer-sponsored health plan trends and self-funding statistics, see the KFF‘s annual employer health benefits survey.
What this means for you
The primary risk is the potential for catastrophic or unpredictable high-dollar claims that exceed the employer’s cash reserves. This risk can be mitigated by purchasing stop-loss insurance, but the employer remains ultimately liable for the primary layer of health care costs.
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