“Self-funded health plans have many advantages, including opportunities for cost savings and more control over the benefits design. However, along with these advantages, these plans have some less obvious disadvantages, such as fiduciary responsibility and financial risks to the employer.

Still, we seldom notice their pitfalls and imperfections until we can't do anything about them. Plan sponsors can be exposed to lawsuits, penalties, and severe consequences, and face risks to their company and personal assets. Having consulted on fiduciary matters for more than 20 years, I have had the pleasure of advising individuals and entities (e.g., agents, employers, plan sponsors, administrators) on fiduciary matters. The world of fiduciary responsibility changes each year, adding risk and complexity.

With the passing of the Affordable Care Act (ACA) in March 2010, the number of self-funded health plans has grown. Self-funding was initially created to allow larger companies to control costs and provide customizable benefits to their employees. Many smaller companies are adopting self-funding, and complications have arisen with their wider acceptance.

Many small businesses have adopted these arrangements without fully comprehending the implications or implementing appropriate control frameworks. They are often comforted by agents and brokers who tell them, “Self-funded plans carry no greater risk than fully insured plans." However, this assertion is far from the truth.

The Silent Danger was crafted to uncover these hidden hurdles and equip fiduciaries and benefits administrators with the information and resources to identify and mitigate the risks associated with self-funded health plans. It delves into the intricacies of responsibilities within self-funded plans through guidance, real-world case studies, and expert perspectives."