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.
| PEO master plan | Self-insured plan | |
|---|---|---|
| Risk model | Insured by PEO's carrier | Employer pays claims directly |
| Cost predictability | Premium-based — predictable | Variable — depends on actual claims |
| Stop-loss insurance | Not needed | Required for catastrophic claim cap |
| Minimum size | Any (pool absorbs variance) | ~100+ for risk pool stability |
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.
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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