Should we self-fund through a big carrier or an independent TPA?

In a self-funded plan, the company processing your claims does not have to be the company that owns the network, the PBM, and the care management program. The right setup depends on whether you value simplicity or control more.

Carrier ASO (bundled). The carrier pays claims with your money and brings everything with it: its own network, PBM, care management, often its own stop loss. You get the strongest network contracts in the market, one ID card, and one phone number. The downside is that everything is tied together. Want a different PBM? Many carriers charge more or won't allow it. Want to shop stop loss? Some price their ASO fees higher if you don't buy theirs.

Independent TPA (unbundled). A TPA administers your plan and lets you plug in each piece: a rented network or reference-based pricing, the PBM of your choice, stop loss shopped across the whole market, and whatever navigation or clinic programs fit your population. You get full claims data and more flexible plan design. The trade-off is more moving parts, and TPA quality varies a lot.

Also keep vertical integration in mind. The biggest carriers now own PBMs, physician groups, specialty pharmacies, and even TPAs. I don't think that makes them bad actors. I do think you should be the one checking whether a referral is the best value for your plan, not just for the parent company.

Many employers start with a carrier and move to a TPA once they see what their data shows.

Questions to ask

Can we choose our own PBM and stop loss carrier, and what happens to our admin fee if we do?
What claims data do we receive, how often, and at what level of detail?
When a claim is denied or delayed, who owns fixing it?

Fully insured, level funded, self-funded, or captive. Which is right for us?

It depends on who you want holding the risk. Fully insured is the simplest and least transparent. Level funding is the usual first step for a healthy group and is most common under 200 employees. Self-funding gives you all the data and keeps the surplus, in exchange for volatility. A group captive gives self-funded employers the same economics with less volatility by sharing a middle layer of risk with peers.

How do I compare two level funded quotes?

Look past the monthly rate. Check how much of the premium goes into the claims fund (some carriers put about 50 percent there, others 60 to 70 percent) and how much of any unused surplus comes back to you (50, 67, or 100 percent). Two plans with identical rates can be hundreds of thousands of dollars apart on those two numbers alone.

What is a group captive, and who is it for?

A group captive lets a set of like-minded self-funded employers share a middle layer of risk. Each employer pays its own smaller claims, the captive pools the mid-size claims across members, and a reinsurer covers the catastrophic layer. It is self-funding with less volatility, and it works best for employers committed to managing cost.