In the world of health insurance, partial self-funding and adopting Health Rosetta-style processes offer employers the opportunity to own their healthcare strategy, reaping significant value and long-term control. By contrast, being fully insured and relying on traditional insurance carriers and brokers is akin to renting—a system that benefits insurers and brokers far more than employers. Much like owning a home, business equipment, or intellectual property, taking ownership of your healthcare plan empowers you to build equity, reduce waste, and customize solutions for your employees.
The Problem: Renting A Health Insurance Plan
For decades, employers have accepted the fully insured model of health insurance. They pay a predictable, often escalating, monthly premium to insurance carriers who dictate terms, hold the financial risk, and reap the rewards of surplus premiums.
This approach leaves employers without control over costs or visibility into how their money is spent. Worse, it incentivizes carriers to maintain the status quo, prioritizing their profits over innovative, cost-saving solutions for employers and employees.
Just as renting a home ensures you never build equity or gain true autonomy, renting your health plan through fully insured carriers limits your ability to manage costs or achieve long-term value.
The Solution: Owning Through Partial Self-Funding
Partial self-funding flips the script, allowing employers to own their healthcare strategy while mitigating financial risk. This approach enables employers to take on predictable healthcare costs while purchasing stop-loss insurance, a safety net that protects against catastrophic claims.
Stop-loss insurance covers exenses above a predetermined threshold, ensuring that employers never face financial hardship from unusually high claims. By coupling partial self-funding with stop-loss insurance, employers can balance ownership benefits with financial security.
Ownership vs. Renting in Healthcare: A Broader Perspective
To understand the power of owning your health plan through partial self-funding, consider these analogies
1. Housing: Building Equity vs. Paying Rent
When you own a home, you invest in an asset that appreciates over time. You can renovate, customize, and build wealth. Renting, on the other hand, is a sunk cost—paying for a space you’ll never own.
Similarly, partial self-funding allows you to build equity in your healthcare plan by retaining reserves, reducing unnecessary spending, and investing in employee health. Fully insured plans, like rent, are money out the door each month with no return on investment.
2. Business Equipment: Long-Term Savings vs. Short-Term Costs
Owning business equipment provides long-term savings and control, while renting leads to higher costs over time.
For example, a manufacturing company owning its machines avoids costly leasing fees and usage limits. Likewise, partial self-funding gives employers control over their healthcare “machinery,” enabling cost efficiency and customization. Fully insured plans, by contrast, are expensive rentals with restrictions that don’t align with your long-term goals.
3. Intellectual Property: Freedom vs. Dependence
Owning intellectual property (IP) means you have complete control over how it’s used and monetized. Renting software or licensing someone else’s IP can be limiting and expensive.
In healthcare, owning your plan through partial self-funding gives you control over plan design, provider networks, and outcomes. Renting from an insurance carrier ties you to their terms, reducing your ability to innovate or optimize.
4. Vehicles: Ownership for Scale vs. Leasing for Flexibility
For businesses that rely heavily on transportation, owning a fleet makes more financial sense than leasing. Ownership removes mileage restrictions, reduces long-term costs, and offers residual value through resale.
Partial self-funding works the same way: employers retain savings and avoid restrictions tied to fully insured plans. With ownership, you scale your plan to match your workforce’s needs without losing control or overpaying for unnecessary coverage. Stop-loss insurance serves as the safeguard that ensures financial risks remain manageable.
A Counterpoint: Is Ownership Always the Right Choice?
While partial self-funding and ownership are clearly the superior strategy for long-term control and cost savings, they may not make sense for every employer.
If you’re an employer who plans to be in business for at least five years or more, investing in an ownership strategy is highly recommended. The time, energy, and effort required to design and implement this approach will yield significant value over the long term.
However, if your business is short-term focused—whether due to industry volatility, a planned sale, or other factors—the investment in ownership may not justify the effort. In such cases, fully insured plans may provide the flexibility and simplicity you need for a shorter horizon.
That said, even short-term employers shouldn’t completely ignore the opportunity to explore partial self-funding. Tools like stop-loss insurance and Health Rosetta principles can still provide benefits without the full commitment of long-term ownership. For example, a smaller-scale partial self-funded plan with stop-loss insurance might reduce costs in the short term without requiring significant administrative burden.
Why Health Rosetta-Style Processes Are Essential
Partial self-funding alone isn’t enough—you need the right strategies to maximize the value of ownership. Health Rosetta principles guide employers in transforming their healthcare plans by focusing on value-based care, transparency, and accountability. Key strategies include:
• Stop-Loss Insurance: Provides financial protection against high-cost claims, making partial self-funding viable for businesses of all sizes.
• Direct Primary Care (DPC): Providing employees with personalized, accessible care that reduces downstream costs.
• Transparent Pharmacy Benefits: Eliminating hidden markups and ensuring fair pricing for medications.
• Employee Engagement: Educating employees to make informed decisions about their health and healthcare spending.
• Data-Driven Decisions: Using claims data to identify cost drivers and implement targeted solutions.
The Financial Case for Ownership
Consider an employer spending $10 million annually on health insurance under a fully insured model. By transitioning to a high performance partial self-funded plan and implementing Health Rosetta strategies, they could save between 10% and 25% to start. These savings could be reinvested into employee benefits, retirement contributions, or the business itself, creating a virtuous cycle of value. Stop-loss insurance ensures that any catastrophic claims are managed effectively, providing employers with peace of mind as they take ownership of their healthcare plan.
Conclusion: Take Control of Your Healthcare Plan
The era of renting health insurance must end. Employers who continue to rely on fully insured models are leaving money on the table and missing opportunities to improve employee health and satisfaction. By embracing partial self-funding, stop-loss insurance, and Health Rosetta principles, you take ownership of your healthcare plan—transforming it into a powerful asset that drives value, reduces costs, and delivers better outcomes.
For long-term businesses, the ownership approach is a no-brainer. For shorter-term employers, partial self-funding still deserves investigation for its ability to balance cost savings and flexibility.
Stop renting your health insurance. Own it. Build equity. Reap the rewards.
