Decision guide

PEO health plan vs. self-insured: when each fits

Self-insured plans replace insurance with direct claim payment (typically backed by stop-loss insurance). They're economical for stable, mid-to-large workforces but risky for small groups with claim variance.

Side-by-side comparison

PEO master planSelf-insured plan
Risk modelInsured by PEO's carrierEmployer pays claims directly
Cost predictabilityPremium-based — predictableVariable — depends on actual claims
Stop-loss insuranceNot neededRequired for catastrophic claim cap
Minimum sizeAny (pool absorbs variance)~100+ for risk pool stability

When PEO master plan wins

PEO wins for: small-and-mid groups where claim variance would dominate self-insured economics.

When Self-insured plan wins

Self-insured wins for: stable mid-to-large groups (100+) where capturing the carrier's margin is worth the risk.

Bottom line

Below 100 employees, PEO master plan beats self-insurance. Above 200 employees, self-insurance becomes economically favorable.

Common questions about PEO master plan vs. Self-insured plan

PEO wins for: small-and-mid groups where claim variance would dominate self-insured economics.

Self-insured wins for: stable mid-to-large groups (100+) where capturing the carrier's margin is worth the risk.

Below 100 employees, PEO master plan beats self-insurance. Above 200 employees, self-insurance becomes economically favorable.

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CG
Precise PEO Editorial Team
Buyer-side PEO advisors

Our team has helped 500+ businesses across SaaS, service trades, professional services, and healthcare evaluate PEO options and place them with the right provider. We are paid only by PEO partners after a fit, never marked up to you.

Vendor-independentCPEO / ESAC verified providers only50+ provider matching poolPlain-English methodology

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