☰These are three positions on one spectrum, defined by who holds the risk in an employer health plan. Fully insured means you pay a fixed premium and an insurer pays the claims. The cost is predictable, but the insurer prices in its margin and keeps the savings of a good year.
Self-funded, including the level-funded packages sold to smaller employers, means your plan pays its own claims, you buy stop-loss coverage to cover any severe ones, and a good year's savings stay with you. On most commercial policies, 20 to 40 cents of every premium dollar covers the insurer's profit and expenses, and that margin is what self-funding goes after.
A captive takes the final step. The stop-loss protection itself can be written by an insurance company you own or co-own, so even the catastrophic layer's underwriting profit can stay in-house. You also gain access to claims data. The trade is volatility, since self-funded and captive plans may be on the hook for a larger portion of bad claim years directly. A feasibility study can be used to decide which structure fits your census, risk tolerance, and balance sheet flexibility.