Most Florida small businesses with under 50 employees use fully-insured group health insurance — paying a fixed monthly premium to a carrier (Florida Blue, UnitedHealth, etc.) that bears all claims risk. Larger Florida businesses often switch to self-funded, where the employer pays actual claims out of company funds and uses stop-loss insurance to cap exposure. Self-funding offers ERISA preemption from state mandates, claims data visibility, and potential cost savings — but only at scale. The breakeven typically sits around 75-100 employees. Level-funded plans bridge the gap for smaller employers.
| Feature | Fully-Insured | Self-Funded |
|---|---|---|
| Who pays claims | Carrier | Employer (from company funds) |
| Monthly cost | Fixed premium | Variable (admin + claims + stop-loss) |
| State mandates apply | Yes (FL essential health benefits, etc.) | No (ERISA preemption) |
| Risk if claims spike | Carrier bears it | Employer bears it (up to stop-loss cap) |
| Cash flow predictability | High (fixed premium) | Lower (variable claims) |
| Claims data visibility | Limited (HIPAA) | Full (employer sees aggregate trends) |
| Plan customization | Limited to carrier offerings | Significant flexibility |
| Typical breakeven | — | 75-100 employees |
Shopping group health for your team
Self-funded plans are governed by federal ERISA, which preempts most state insurance laws. For Florida self-funded plans:
Self-funded plans almost always include stop-loss to cap employer claims exposure:
Without stop-loss, a single high-cost claim ($500,000+ for transplant, premature infant, etc.) could devastate a small employer.
Self-funded means the employer pays claims as they arise — typically 30-60 days after service. Cash flow can swing significantly month-to-month:
| Month | Fixed Components (Admin + Stop-Loss) | Variable (Claims) | Total |
|---|---|---|---|
| Quiet month | $8,000 | $15,000 | $23,000 |
| Average month | $8,000 | $50,000 | $58,000 |
| Heavy month (one large claim) | $8,000 | $120,000 | $128,000 (until stop-loss kicks in) |
Level-funded plans (covered separately) give Florida small businesses a structured path to self-funding economics with fully-insured-like predictability. Most level-funded plans require 5-99 employees, with the sweet spot at 25-99.
A licensed Florida broker can model both approaches at your specific size.
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