Stop Paying for Their Profits: Why Self-Funded Health Plans Put Your Company First

When CFOs evaluate health plan options, they're often presented with two primary paths: fully insured plans managed by traditional carriers, or self-insured plans administered by third-party administrators (TPAs). But here's the uncomfortable truth most benefits consultants won't tell you: these two approaches serve fundamentally different masters.

Fully insured carriers design plans around their own profitability. Self-insured plans administered by client-focused TPAs like Quilt Benefits design plans around yours.

The Carrier-First Model: Fully Insured Plans Built for Insurance Company Profits

Traditional insurance carriers operate on a simple premise: collect more in premiums than they pay out in claims. Every plan design decision, every coverage restriction, and every renewal strategy serves this primary objective.

How Carriers Maximize Their Bottom Line

Insurance carriers have perfected the art of profit optimization at their clients' expense. They collect fixed premiums regardless of actual claims, meaning when your employees stay healthy, carriers pocket the difference. When claims spike, they simply jack up next year's premiums by 15% or more: sometimes with zero justification beyond "market trends."

Carriers deliberately limit your access to claims data, keeping you in the dark about where your healthcare dollars actually go. This information asymmetry isn't accidental: it's strategic. Without visibility into your own claims patterns, you can't challenge their pricing decisions or identify cost-saving opportunities.

The plan designs themselves reflect carrier priorities. Restrictive networks, high deductibles, and limited coverage options aren't necessarily about controlling costs: they're about controlling carrier risk while maintaining premium income. Every "standard" benefit reduction translates directly to improved carrier margins.

The Hidden Costs of Carrier-Centric Design

Fully insured plans typically cost 10-15% more than self-funded alternatives, but the real financial damage goes deeper. Carriers bundle their administrative fees, profit margins, risk charges, and reserve requirements into your premiums. You're essentially paying for their shareholders' dividends and executive compensation packages.

State premium taxes add another layer of expense that carriers pass directly to you. These taxes: often 2-3% of total premiums: disappear entirely with self-funded plans thanks to ERISA protections. For a company spending $2 million annually on health benefits, that's $40,000-$60,000 in pure tax savings alone.

The Client-First Model: Self-Insured Plans Designed for Your Success

Self-insured plans flip the incentive structure entirely. Instead of designing benefits around carrier profitability, every decision centers on your financial performance and employee satisfaction. This alignment creates a fundamentally different relationship: one where your TPA's success depends on your success.

True Cost Transparency

With self-insured plans, you see exactly where every healthcare dollar goes. Detailed claims reporting reveals which conditions drive costs, which providers deliver value, and which programs generate savings. This transparency empowers data-driven decisions that directly impact your bottom line.

When claims run lower than projected, you keep the savings. When unusual claims spike costs, you have the data to understand why and implement targeted interventions. This real-time financial visibility gives CFOs unprecedented control over one of their largest expense categories.

Customization That Actually Serves Employees

Self-insured plans allow complete customization based on your actual workforce demographics and health patterns. Instead of forcing your employees into cookie-cutter carrier plans, you can design benefits that address their specific needs while managing your specific risks.

A tech company with a young, healthy workforce might emphasize preventive care and mental health benefits while minimizing high-deductible features. A manufacturing company might focus on injury prevention and occupational health services. These targeted approaches deliver better employee outcomes at lower costs than generic carrier plans.

How Quilt Benefits Changes the Game for Self-Insured Plans

At Quilt Benefits, we've built our entire platform around a radical concept: your success is our success. Unlike traditional carriers that profit from your overpayments, we succeed only when we deliver measurable value to your organization.

Fortune 100 Systems for Mid-Market Budgets

Our Smart Fabric Networks technology gives you the same analytical capabilities and plan management tools that Fortune 100 companies use to optimize their self-insured plans. Real-time claims monitoring, predictive analytics, and automated cost containment measures work 24/7 to protect your bottom line.

CFOs partner with us to implement sophisticated pharmacy benefit management, surgical cost transparency, and chronic disease intervention programs that would cost hundreds of thousands of dollars to develop internally. We deliver these enterprise-grade capabilities at a fraction of the cost because our technology platform scales across our entire client base.

Proactive Partnership vs. Reactive Service

Traditional carriers respond to problems after they impact your renewal. We prevent problems before they damage your budget. Our clinical teams identify high-risk members early, connect them with appropriate interventions, and monitor outcomes to ensure cost-effective care delivery.

When a million-dollar claim appears on the horizon, we're already working with medical case managers, coordinating with your stop-loss carrier, and implementing containment strategies. This proactive approach has helped clients avoid hundreds of millions in preventable claims over the past decade.

Complete Financial Alignment

Our compensation model aligns directly with your financial performance. We earn administrative fees based on efficient claims processing and successful cost management: not inflated premium collections. When we help you save money, we create a sustainable partnership that benefits everyone except traditional insurance company shareholders.

The Numbers Don't Lie: A Direct Comparison

Factor	Fully Insured (Carrier-First)	Self-Insured with Quilt (Client-First)
Cost Structure	Fixed premiums with 10-15% carrier markup	Variable costs based on actual claims
Savings Potential	Carrier keeps unused premiums	You keep savings from efficient care
Premium Taxes	2-3% state taxes included	ERISA exemption saves thousands annually
Claims Data Access	Limited, delayed reporting	Real-time, detailed analytics
Plan Customization	Carrier-designed standard options	Fully customized to your workforce
Cost Increases	15%+ annual increases common	Based on your actual experience
Financial Risk	Carrier bears risk (and profits)	Managed through stop-loss protection
Pharmacy Management	Basic carrier formularies	Sophisticated PBM strategies

Making the Strategic Choice: Your Financial Future Depends on It

For CFOs managing organizations with 50+ employees, the choice between carrier-first and client-first benefit strategies represents one of the most significant financial decisions you'll make. The cumulative impact over five years can easily reach six or seven figures.

Choose Self-Insured with Quilt Benefits When:

• You want complete visibility into healthcare spending patterns

• Your organization values customized employee benefits over standardized packages

• You prefer partnerships over vendor relationships

• Cost control and predictable budgeting matter more than premium simplicity

• You're ready to leverage enterprise-grade analytics for competitive advantage

Consider Fully Insured Only When:

• Your organization has fewer than 50 employees

• Administrative simplicity outweighs cost optimization

• Financial volatility poses existential business risks

• Internal benefits expertise is unavailable

Your Partner for Client-First Benefits Strategy

The fundamental question isn't whether fully insured or self-insured plans are "better": it's whether you want to design your benefits strategy around insurance company profits or your organization's success.

At Quilt Benefits, we've partnered with hundreds of organizations to transition from carrier-first to client-first benefit strategies. Our clients typically see 20-30% cost reductions in year one while improving employee satisfaction scores and health outcomes.

CFOs sleep comfortably knowing they have real-time visibility into their healthcare spending, predictable cost management tools, and a partner completely aligned with their financial objectives. HR teams gain access to sophisticated member engagement platforms, personalized wellness programs, and clinical support services that actually improve employee health.

Your employees deserve benefits designed around their needs, not insurance company margins. Your organization deserves a benefits partner whose success depends entirely on delivering measurable value to your bottom line.

The choice is clear: continue funding carrier profits through inflated premiums and restrictive coverage, or partner with Quilt Benefits to build a client-first benefits strategy that puts your organization's financial health first.

Ready to explore how much you could save with a client-first approach? Let's design a benefits strategy that works for you( not against you.)