Self-insuring is an attractive concept because of the flexibility it offers an employer to design a health plan that falls within its budget and meets the unique needs of its employees. The potential for cost savings is greater when an employer pays claims directly instead of paying premiums to an insurer, as in a fully insured plan.
A recent Aon Hewitt report found that health care costs for employers are rising four times faster than wages, and premiums have more than doubled in the last 10 years.
