This article also appeared in Corporate Counsel (June 2006).
Every year, an increasing number of employers decide to self-fund the medical benefits they provide to their employees. They are drawn to readily apparent advantages, such as up-front cost-savings, tax benefits and avoidance of state laws. Yet many employers may not fully understand the small print behind their self-funded benefits plans. In particular, they may not appreciate important nuances that can impact the three principal documents of self-funding: third-party administrator (TPA) agreements, stop-loss insurance policies and summary plan descriptions.