Health · Chapter 14 · Alternative Group Forms
Self-Funded Plans, Stop-Loss & ASO
Definition
The employer funds and pays claims itself under an ERISA employee welfare benefit plan ('self-insurance' ≠ no insurance). Stop-loss insurance reimburses the employer when claims exceed a retention limit. An ASO contract hires an insurer/TPA for administration only — the insurer processes claims but isn't liable for them.
In plain English
The company becomes its own insurer, buys catastrophe backup, and rents an insurer's paperwork department.
Easy to confuse with
These are what this term gets tested against — if you can't tell them apart cold, drill the contrast.
Related terms