Who this fits: healthy owners and small teams who earn too much for marketplace subsidies and want a PPO network, a range of deductibles down to $0, and predictable monthly costs.
- 67%of covered U.S. workers are in self funded plans, per KFF 2025
- 37%of covered workers at firms with 10 to 199 employees are in level funded plans
- $0lowest deductible tier available on some small group self funded plans
How a self funded plan works
In a traditional insured plan, the insurer takes all the risk and charges a fixed premium. In a self funded plan, the employer pays claims from a fund, a third party administrator runs the plan, and stop loss insurance caps the employer's risk. Small business versions bundle all of that into one fixed monthly payment, which is why KFF calls the most common version level funded. KFF's 2025 survey found 37 percent of covered workers at firms with 10 to 199 employees are now in level funded plans.
Who qualifies
- Business owners with an LLC or EIN. A 1099 income alone usually is not enough. You need a real business entity, even a one person one.
- Small groups. Groups of roughly 1 to 10 typically answer a health questionnaire. Larger groups are usually underwritten from a census, and a recent renewal can sometimes replace the questionnaire.
- Reasonably healthy groups. These plans are not guaranteed issue, so serious conditions can lead to a decline. Marketplace plans remain the backstop for anyone who is declined. Read marketplace vs private health insurance for that comparison.
What the plans look like
Typical lineups run from a $0 deductible plan with flat copays to high deductible plans that pair with a health savings account. Preventive care is usually covered at no cost, and many use a large national PPO network so you can see specialists without referrals. Here is my explainer on how HSA plans work.
The honest tradeoffs
- Underwriting means not everyone is approved, unlike ACA plans.
- These plans may not cover every ACA essential health benefit, so check the plan document for anything you rely on.
- Honesty on the health questionnaire is critical. Wrong answers can lead to denied claims.
- Renewal pricing depends on how the group's claims run.
For a healthy owner who would pay full price on the marketplace, the savings and the PPO network can be well worth it. For someone who qualifies for a big subsidy or has major health issues, the marketplace usually wins. I will show you both.
Bottom line
If you own a business and earn too much for subsidies, ask about a self funded plan before you renew. Tell me your ZIP, ages and team size, and I will compare it against every marketplace option. See also my guides for owners with no employees and small business health insurance in Tampa.
Common questions
Can a one person business get a self funded health plan?
Often yes. Some self funded plans accept groups as small as one owner, as long as the business has an LLC or an EIN. Income reported on a 1099 alone usually does not qualify.
What is a level funded health plan?
A level funded plan is a small business version of a self funded plan. The employer pays one fixed monthly amount that covers expected claims, administration and stop loss insurance, which caps the employer's risk.
Are self funded plans guaranteed issue?
No. Small groups usually complete a health questionnaire and can be declined. Marketplace plans remain available to anyone during open enrollment or a special enrollment period.
Is a self funded plan cheaper than a marketplace plan?
It can be for healthy owners who earn too much for marketplace subsidies. For people who qualify for large subsidies or have serious health conditions, a marketplace plan is often the better deal.
See if your business qualifies
Tell me your ZIP, ages and team size. I will compare a self funded plan against every marketplace option, free and usually same day.
Get my free comparison → Book a callSources