The shop writes the checks. The night does not move.
Self-funded.
If you could pay cash for the MRI and only use insurance for the crash, this would be a steal. Almost nobody does that. They rent a network, keep 2–3×, buy a cheap wrap, and hope a good year stays in the company. Here is who gets what, how much extra you pay if you do not, and why the worker is the easiest place to “save.”
What it is · Two piles · Who keeps it · If you do not · The wrap · Why not cash · Who likes it · The leftover · The door · If they ban you
The shop writes the checks. The worker still has a Blue card.Self-funded means the company pays medical bills as they arrive, instead of buying a fully insured premium from a carrier. The worker still swipes an Aetna, Cigna, or United (UMR) card. The hospital still sees a network. The night is still 2–3× a public fee. You changed the checkbook. You did not fire the price.
Learn — the CFO page · Most large shops already are · Journey
Body vs wrap
Two piles. You only bought one of them as insurance.
The body is almost every claim under a cap — often $100,000 per person. The shop pays that as bills. The wrap is stop-loss: a real reinsurance desk that pays after one person’s year crosses the cap. You did not buy the first $100,000 of coverage. You still buy the first $100,000 of nights if someone uses them. Not buying insurance for a layer does not mean you skipped the tower. It means those nights are claims, not a Blue Cross line item.
Who gets what
Same tower. Different invoice. The leftover in a good year is the only new prize, and it sits with the shop.
The hospital
The 2–3× night, either way. They do not know you are self-funded. They see a network card.
Fully insured carrier
Claims at 3×, plus a load. Affordable Care Act medical-loss ratio: they may keep up to 20% of premium (small group / individual) or 15% (large group). In practice large group is closer to a dime.
The rented desk (self-funded)
A third-party administrator (TPA) / administrative-services-only (ASO) fee, often the pharmacy-benefit-manager spread, and stop-loss profit. Not 15–20% of the whole claims pile.
Stop-loss
About $229 per employee per month at a $100,000 attachment on today’s 3× book. That is the tail. Not care.
The employer
Whatever is left after claims, the desk, and the wrap. A good year is company cash. There is no medical-loss-ratio rebate to the worker.
The worker
A deductible and a card. Paycheck deductions buy “coverage,” not a share of leftover claims. They do not get a surplus check.
Worker deductions are a monthly share of coverage, not an escrow of actual claims. If money sits in a real plan trust, surplus generally stays for benefits. Most shops pay from company cash. Then a cheap year is profit.
If you do not self-fund, you still pay 3× — plus a load.You pay one premium. Most of it is the 2–3× nights, doctors, pharmacy. The rest is the insurer’s load: admin, tax, profit. The hospital does not add a second 20% fee on the night.
Small group and individual: at least 80% of premium must go to claims and quality. They may keep up to 20%. If they keep more, they rebate.
Large group: 85% / keep up to 15%. Kaiser Family Foundation 2025 simple loss ratios: about 87% small group (keep ~13%) and 91% large group (keep ~9%). National health accounts: net cost of private health insurance about 10% of private insurance spending.
If 3× claims are $100, an 80% rule means a $125 premium. You paid the tower and $25 of load. Self-funded, you still pay the $100 of 3×. You swap the $25 for a claims desk plus the wrap — smaller, not zero. A 20% fully insured renewal is a year-over-year hike, not this annual keep.
Where a premium dollar goes · Medical-loss ratio
The wrap is cheap. That is not a $229 health plan.
2025 Aegis Risk Medical Stop-Loss Premium Survey (1,268 shops, 1.2 million employees). Average specific stop-loss, paid contract, per employee per month. Priced off today’s 3× book.
Attachment (per person)Per employee per monthPer worker per year
$100,000$229.40about $2,750
$200,000$120.01about $1,440
$500,000$50.98about $610
$1,000,000$17.69about $210
Sourced: Aegis Risk 2025, paid contract. Not a voucher for that much care. The shop still pays every claim under the cap as bills arrive — not $100,000 × headcount in a vault.
You cannot walk into Healthcare.gov and buy a $100,000-deductible plan for $229 a month. Stop-loss is casualty insurance for the employer, not major medical for you. The Affordable Care Act caps the worker’s in-network year around $9,200 (2025) / $10,600 (2026). The shop can have a $100,000 attachment while you have a $3,000 deductible. Those are two different “deductibles.”
A typical family job sticker is still in the mid-twenty-thousands (employer plus worker, Kaiser Family Foundation Employer Health Benefits Survey neighborhood). The wrap is about $2,750 per worker per year at a $100,000 cap. The $27,000 was never mostly the tail. It was the body at 3×, plus a load. $18 per employee per month at a $1 million cap is not a million dollars of care for $210. It pays only after one person passes $1 million.
Aegis numbers · Self-funded share
Why they do not pay cash for the first $100,000
They should. That is the deal they think they bought. The $100,000 line cannot flip the hospital’s sticker.
Why the hybrid fails
The hospital never sees $100,000
That line is a split between the shop and the reinsurer. The hospital gets a network card or cash. An intensive-care stay does not bill cash until Thursday and United on Friday.
Why the hybrid fails
Stop-loss pays the shop, not a new price
After $100,000 it reimburses the employer for plan-paid amounts at whatever unit price the plan already used. If you were on the preferred-provider organization all year, the wrap pays 3× too. If you paid a posted menu, the wrap pays the menu.
Why the hybrid fails
Cash at the monopoly is often the rack
Surgery Center of Oklahoma posts a menu. A must-have emergency department often bills the chargemaster if you have no contract — worse than insured, not better. Cash is the good price only where someone posts.
Why the hybrid fails
The rented network fights steering
Administrative-services-only is a bundle. Use the tower for the scan if you want the tower for the night. The desk is not paid to send the knee to a cash shop. Aegis: almost nobody buys reference-based pricing or direct cash.
Why the hybrid fails
If the plan does not pay, it does not count
The attachment is plan-paid eligible claims. Cash from the worker’s checking account does not fill the $100,000 bucket. Cash for the body only works if the shop pays the sticker — a funded card, not a secret toggle.
Who likes it, and why
Three desks, three incentives. The night does not change for any of them unless someone posts a price.
They sold the risk and kept the deskInsurers
Why they like it
Administrative-services-only: no crash on their books, still the network rent, the pharmacy-benefit-manager, and often the stop-loss. Medical-loss ratio does not apply to the employer’s book. They get paid to be a claims clerk.
What it actually is
Fully insured, a fatter claims pile is a fatter premium and they keep a cut. Self-funded, they skip the crash and still collect on the machine. Both ways they pass through 2–3×. They do not invent the night.
Employers
Why they like it
A good year stays home. Fully insured, the carrier keeps it. Skip premium tax and insurer margin on the whole sticker — maybe high-single-digit to low-teens percent, not half. Employee Retirement Income Security Act (ERISA) room. After a 20% fully insured renewal, the broker sells this as a choice.
What it actually is
They took the body — where the tower lives — and left a cheap tail. Reward is small unless they change the price. Most never do. Forced is this: pay 3× as premium or pay 3× as claims. That is which checkbook, not a bargain with the hospital.
Patients
Why they like it
The badge still works. They do not have to shop. Nobody told them they are the insurer now. That is the like: the same card, the same door.
What it actually is
Surplus is not their rebate. Paycheck deductions were for coverage, not an escrow. The easy way for the shop to “beat” the pool is a higher deductible, a skinnier network, more of the body from checking. They like it only if leftover cash becomes better benefits or a posted swipe. Usually it does not.
If the shop thinks it can beat the fully insured sticker — healthier people, or it will actually shop — it keeps the body and hopes leftover cash stays home. That is not a pharmacy-benefit-manager kickback. It is claims coming in under what Blue Cross would have charged for the same 3× book. Maybe. Maybe not. You did not take all the risk. The wrap still sits on Jane. You took the boring middle. A trust (some union funds, a voluntary employees’ beneficiary association) generally keeps surplus for benefits. Most companies pay claims from regular company cash. Then a cheap year is profit, even though the worker contributed. The incentive pays for a smaller plan check. Beating the night is hard. Beating the worker is easy.
The version that actually skips the first $100,000 of 3×Posted cash for the body, wrap only the crash, money on a funded card so nobody wires the implant from checking. Then the $229 wrap is cheap on a menu, not on United’s night. That building is Flagship. The shovel is The plant. Until that door exists, self-funded is the same tower with a different invoice — and a bonus for whoever shrinks the pile.
Flagship — the door · Hostile world — no network · The plant · One sticker · Direct contracts
The hallway: Flagship · Hostile world · The plant · Mark · Learn · Positioning · Negotiation · Faith · Stop-loss · Who is already in it