Migration Decision Criteria
| Factor | Favorable for Migration | Unfavorable for Migration |
|---|---|---|
| Employer size | 300+ employees | <200 employees |
| Claims experience | 3+ years of favorable experience | Recent large claims or trend |
| Risk tolerance | Willing to absorb year-to-year variation | Requires predictable costs |
| Administrative capacity | Dedicated benefits team | HR generalist only |
| Stop-loss market | Favorable stop-loss terms available | Hard market; limited stop-loss options |
Migration Process
- 1TPA selection: Select a TPA with strong claims processing, analytics, and member services
- 2Stop-loss selection: Select a stop-loss carrier with favorable terms and strong financial strength
- 3Network selection: Select a provider network (carrier network, RBP, or direct contracts)
- 4Plan document: Develop a self-funded plan document with ERISA counsel
- 5Member communication: Communicate the transition to employees
- 6Go-live: Implement the self-funded plan on the effective date
Migration Benefits
IQ Insight
Employers who migrate from level-funded to self-funded plans gain: (1) greater flexibility in plan design; (2) full claims data access; (3) ability to implement advanced cost management strategies (direct contracting, RBP, international drug sourcing); (4) elimination of carrier profit margin; and (5) greater control over vendor selection. The migration is a significant step — but one that delivers substantial long-term value.