Self-funding could give your company more control over its single biggest people cost.
Health benefits make up 70% of total compensation costs, yet most HR teams have zero visibility into what's driving spend. Alternative funding models change that. Find out the options for your company.
See if alternative funding fits your company
Fully insured vs. self-funded. What’s actually different.
Not all health plans are funded the same way. Here’s what changes depending on which model you choose.
Fully insured
Level funded
(best for 50-2k)
Monthly cost
Fixed premium
Fixed monthly rate
Financial risk
Carrier absorbs all risk
Shared — stop-loss included
Cost predictability
High
High
Claims data access
None
Limited
Potential for savings
No — surplus goes to carrier
Yes — possible year-end refund
Plan design flexibility
Low
Medium
Admin complexity
Low — carrier manages
Low to medium
Stop-loss protection
Not needed — carrier holds risk
Included in monthly payment
Best fit
Smaller employers, limited HR resources, risk-averse
Mid-sized employers wanting predictability with savings upside
Self-funded
Gap funding
Monthly cost
Variable — based on claims
Lower premium, variable gap
Financial risk
Employer absorbs claims risk; stop-loss recommended
Employer covers defined gap only
Cost predictability
Medium
Medium
Claims data access
Full access
Minimal
Potential for savings
Yes — directly if claims run low
Yes — via lower premiums
Plan design flexibility
High
Medium
Admin complexity
Higher — TPA recommended
Medium
Stop-loss protection
Purchased separately — highly recommended
Underlying plan is fully insured
Best fit
Larger employers with stable cash flow and benefits expertise
Employers testing alternatives while staying mostly insured
Free resource
Beyond fully insured: Better data, smarter funding
A candid, no-jargon AMA with two Nava benefits experts covering what alternative funding actually looks like in practice. Learn the following:
- How to know if alternative funding is right for your org
- What employees experience during a transition
- How to make the case to your finance team
- What you can actually do with claims data once you have it
Alternative funding isn’t a workaround. For many mid-sized companies, it’s a better strategy.
2026 renewals are breaking records. HR leaders who understand alternative funding have
more levers to pull for their budget and their workforce.
Real cost transparency
Self-funded and level-funded plans give you actual claims data, so you can see what’s driving costs and act on it.
Plans built for your workforce
Alternative funding unlocks plan design flexibility fully insured plans don’t allow, from custom networks to programs your employees actually use.
The right model grows with your company
Level funding is often the entry point. As your workforce and data mature, there’s a clear path toward greater control and deeper savings.
Not sure which model fits your company?
Talk to a Nava expert. In 20 minutes, we’ll help you figure out if your current funding strategy is costing you more than it should.
Chris Renzulli
Nava National Benefits Broker, California
