The Advisor's Edge - August 2026
How to create clarity, upcoming events, and travel reflections.
The Power of Information
How access to data can create clarity and revolutionize your benefits strategies.
Having taken some time off in July, I’ve returned to the hustle and bustle of Q4, the most wonderful time of the year to be in employee benefits. Much like a tax accountant has “tax season,” we have “fourth quarter,” which has migrated from being an actual quarter to nearly half the year.
And it is the most wonderful time of the year.
This is the season where all of the idealism, the strategy, the planning, the education, and the mutual desire by client and advisor to do better than last year takes a bias towards action.
It’s when we lean in to conversations about our claims performance, healthcare trends, forecasting, and the dreaded renewals.
It’s when we get better, together.
Why Self-Funding?
Earlier this week, we completed a planning call with a client scheduled to ensure we were all on the same page for an upcoming presentation to some of their board members.
This client moved from a fully insured plan to a self-insured plan last January, and after six months, their claims are running a little higher than expected.
It’s funny, though, having been fully insured, those expectations had no real basis in reality. Every year they received a number. Last year, before moving to HUB, it was over 20%. They never saw what was behind it. No claim details. No utilization patterns. No visibility into which conditions were driving costs, or which members were driving those conditions. Just a premium, and a renewal increase they had no way to challenge.
So when they moved to self-funding and started seeing actual claims data, it just felt high. But high compared to what?
There was no real baseline. The reaction had less to do with expectations but with transparency. They now had a sense of what was actually happening within their population. They were beginning to see who they really were for the first time.
I reminded them, and I want to be direct about this, because I think the industry sometimes oversells the moment, self-funding is not a silver bullet.
Self-funding does not automatically generate savings. Moving off a bundled or fully insured plan, by itself, does not make your population any healthier, and it does not make your cost curve flatter.
What it does do is generate transparency. And transparency is what lets you actually manage the plan instead of just paying for it.
Now that we can see the claims, we can see the story behind the numbers. We can identify which claims are emerging as cost drivers. We can evaluate if their available point solutions can be leveraged. We can create targeted education and resources to address gaps and increase awareness in their population.
The real case for self-funding isn’t “cheaper”; it’s clearer.
The Fundies (a.k.a, Fundamentals)
If you’ve read any of my past articles or we’ve spoken in person, you know I’m no fan of the fully insured or fully bundled model. The traditional programs were not built to reward employers for managing their population well. They were built to protect the carrier’s margin and reward shareholders. You, the employer, are merely a source of revenue.
Self-funding shifts that. Three things change when you move along the spectrum from fully insured towards self-funded:
Transparency: You see your own claims data. Not an acturial estimate of risk, but your actual risk, in detail.
Financial control: Instead of paying a fixed premium that bakes in carrier profit and risk margin, you pay for the claims your population generates, plus fixed costs that you can plan around.
Risk-transfer ability: This is the one people forget. Self-funding does not mean going bare. It means choosing, deliberately, how much risk you carry and how much you transfer. That choice is where stop-loss, or reinsurance, comes in.
Self-funding does not remove risk. It puts you in charge of deciding what to do with it.
The Need-to-Know: Stop-Loss, Lasers, and Renewal Caps
This is the part of self-funding most employers skip past too quickly, and it is the part that actually determines whether your plan feels stable or feels likes a free fall. Given the above conversation about risk-transfer ability, I thought it may help to dive into the details just a bit deeper.
What is stop-loss?
Stop-loss is insurance you buy to protect your self-funded plan from catastrophic claims. Think of it as a ceiling. You agree to fund claims up to a certain point, and the stop-loss carrier picks up everything above it.
There are two kinds, and both are viable for most employers:
Specific stop-loss protects you against one member having a catastrophic claim. If an individual’s claims exceed your specific deductible, the excess is reimbursed.
Aggregate stop-loss protects the whole plan. If your total claims across the entire group exceed a set percentage of your expected cost, usually 125%, the excess is reimbursed.
Specific stop-loss protects you from one bad diagnosis. Aggregate stop-loss protects you from a bad year.
What is a laser?
A laser is when your stop-loss carrier sets a higher specific deductible for one individual member, instead of the standard deductible that applies to everyone else.
This usually happens at renewal, when a member has an ongoing high-cost condition. The carrier is not saying no. They are saying: for this member, you are on the hook for more before our coverage kicks in.
Lasers are one of the most misunderstood parts of stop-loss. They are not a penalty. They are a pricing mechanism. If, however, you do not take the right precautions when purchasing your stop-loss insurance, they can quietly erode the protection you thought you had. This is exactly the kind of detail that gets missed without a broker actively managing your renewal, not just delivering it.
What is a renewal cap?
A renewal cap limits how much your stop-loss rates can increase at renewal, year over year. Instead of an open-ended increase, you negotiate a ceiling in advance. This is particularly important if you purchase a stop-loss policy that prohibits future lasers.
A renewal cap will not save you from a genuinely bad claims year. But it protects you from a stop-loss carrier using one bad year to reset your baseline permanently. The renewal cap terms can be the difference between a good stop loss policy and a mediocre one.
How These Create Stability
Put together, these three pieces are what make self-funding sustainable instead of just self-funding.
Specific stop-loss means one catastrophic claim will not sink your plan year. Aggregate stop-loss means a bad year across your population will not sink it either. A well-negotiated renewal cap means a bad year does not follow you permanently into next year’s pricing.
This is the part of the self-funding conversation that gets the least airtime, and it deserves more. Employers spend a lot of energy deciding whether to move along the spectrum toward self-funding. They spend far less evaluating how their stop-loss is actually structured, whether their broker is watching for lasers before renewal, or whether a renewal cap was even on the table.
That is where the real risk sits. Not in the decision to self-fund, but in the details of how it protects you once you do.
Where This Leaves You
My client’s claims were not a red flag. They were a flashlight.
For the first time, that employer could see what was actually happening inside their plan, and that visibility is what enables us build a real strategy instead of guessing at renewal every year.
Self-funding will not do that work for you automatically. Stop-loss will not either. But together, structured correctly and reviewed carefully, they give you the two things a fully insured plan never could: the truth about your population, and the ability to act on it.
That is where strategy meets sustainability.
If you’re evaluating stop-loss on your current or upcoming self-funded plan, reach out to me directly. I’m happy to walk through what your structure actually protects, and where it might be leaving you exposed.
News You Can Use
Below are a select number of events and updates that may be valuable:
HUB International’s 2027 Benefits Cost Trends Report is Here
Healthcare costs aren’t just rising—they’re accelerating. For organizations heading into budget and renewal season, having a clear picture of what’s driving your numbers can be critical.
HUB’s 2027 Benefits Cost Trend report draws on responses from more than 30 carrier, TPA, and pharmacy partners to deliver national and regional trend projections.ACA Affordability Increases Again for 2027
The ACA affordability percentage for 2027 will increase to 10.22%, the highest to date and the third consecutive annual increase. Learn more here.
Save the Date: HUB Colorado’s Leadership Summit
The third annual 2026 HUB Colorado Leadership Summit is coming back this fall!
Expect a day filled with inspiring keynote speakers, thought-provoking panels, real-world strategies, and unparalleled networking with Colorado’s brightest leaders.
📅 October 7th, 2026
📍Empower Field's United Club in Denver
Worth Sharing
I mentioned in the opening that I had taken some time off in July. My wife and I took our middle daughter to Greece to celebrate her recent graduation from CU Boulder.
We departed on July 1st, so we missed the 250th Anniversary Celebration of our great nation. I would contend, however, that visiting other parts of the world did more to engender gratitude than sitting in a park and watching fireworks ever could have.
There were a few key observations that stood out more than others. Here are a few:
Everywhere we went in Greece, your toilet paper had to be disposed of in a trash can, not the toilet. Most of the highways we drove were two lanes. Traffic in the cities was pure chaos. We have infrastructure, a level of organization, and safety protocols that are easy to take for granted.
Nearly all the towns we visited consisted of buildings being used today that have stood longer than the United States has existed. 250 years is just a beginning. While ebbs and flows can be expected, we each have to commit to kindness, patience, perspective, and a willingness to love and respect our fellow Americans. To do otherwise will ensure our eventual demise.
We’re all pretty darn similar. We commonly sat in restaurants where every group at a nearby table spoke a different language. Yet, if you could mute the sound coming from their respective mouths, it looked no different than walking the streets of any big city. There were light-skinned and dark-skinned, bald and hairy, short and tall, skinny and fat, wealthy and poor. It reminded us that we’re all just trying to do our best, and we can never know what’s going on with one another. So, just give each other some grace and some patience.
If I can be of assistance, please give me a shout.
Thank you,
Jim Sampson