How the Right Consultant Helps Reduce Self-Funding Risk

Self-funding is a health plan financing model where the employer assumes the financial risk for paying employee medical and pharmacy claims directly. When claims come in lower than projected, the employer keeps the surplus, creating an opportunity for cost savings. To safeguard against unpredictable, high-cost events, most employers pair self-funding with stop loss insurance. 

How Stop Loss Insurance Protects Self-Funded Health Plans

Stop loss coverage caps the employer’s liability, which ensures protection from catastrophic expenses that could otherwise destabilize cash flow and derail budgets. Without stop loss protection, the employer would bear the full cost of large claims, exposing the organization to potentially severe financial disruption depending on the claim’s severity. 

The main risk of a self-funded health plan is that actual claims can surpass the employer’s annual budget, especially when members have ongoing, high-cost medical conditions that may also increase future costs. Major budget overruns often stem from members requiring expensive treatments, such as cancer care, organ transplants, specialty medications, or complex surgeries like those for the heart or musculoskeletal system. 

Stop loss coverage helps protect employers from high treatment costs, but it only activates after the employer has paid a set amount in claims up to a defined deductible. If several large claims arise in a single year, the employer must fund each one up to its stop loss limit, which can still place significant pressure on the organization’s budget and cash flow. 

Partnering with an experienced benefits consultant is critical for minimizing the risks inherent in self-funded health plans. The right consultant delivers precise budgeting with appropriate underwriting margins, leverages clinical nurse reviews to evaluate ongoing high-cost liabilities, and proactively identifies cost-containment opportunities.

Additionally, they provide ongoing education to keep clients informed about emerging clinical trends that may impact plan performance. Currently, cancer stands as the leading driver of stop loss reimbursements in the industry. Staying ahead of advancements in cancer treatments is essential, as these innovations are poised to significantly affect both stop loss coverage and future budgeting strategies. 

Why Cancer Is Driving Stop Loss Reimbursements Higher 

Cancer continues to be the predominant driver of stop loss reimbursements, outpacing all other diagnoses by a wide margin. Sun Life’s High-Cost Claim and Injectable Drug Trends Analysis reports that malignant neoplasms, or general tumors, accounted for $528 million in stop loss reimbursements in 2025, more than triple the amount for the next highest category, cardiovascular conditions, which totaled $173 million. 

Recent cancer trends are especially alarming. Cancer is no longer a condition seen only in older adults.

Increasingly, cancers are showing up in younger populations, including adolescents and young adults, which changes both the clinical and financial profile of these claims. The National Cancer Institute notes that cancer incidence among adolescents and young adults ages 15 to 39 has been rising on average 0.3% per year over the last decade, and SEER data show that childhood leukemia is most common in children ages 1 to 4, with a substantial share of cases also occurring in older children and teens. 

This trend matters for employers and stop loss carriers because younger patients often require long treatment courses, intensive coordination, and high-cost specialty care at a time when the diagnosis is unexpected and emotionally difficult for families. Patients need coordinated care, close monitoring, and frequent adjustments to treatment plans. From a plan perspective, that same care pattern creates unpredictable costs that can push claims well beyond expected levels. 

Blood cancers now account for a substantial share of stop loss claims, ranking among Sun Life’s top five diagnosis categories alone and contributing to a marked increase in total stop loss reimbursements. According to the OneDigital Self-Funded Center of Excellence, this trend has led to double-digit percentage increases in stop loss premiums and a shift toward more conservative risk allocation by carriers. 

High-Cost Blood Cancers and What They Mean for Employers 

Acute Lymphoblastic Leukemia and Multiple Myeloma represent two of the most critical blood cancer diagnoses, particularly when affecting young children. These cases often require highly aggressive and extended treatment regimens, with annual costs frequently exceeding $1 million. Beyond the immediate financial impact, the prolonged nature of care substantially increases risk exposure and liability transfers within the stop loss insurance market, underscoring the importance of proactive risk management and early intervention strategies for employers and insurers. 

Below includes the annual cost average and treatment progression for Acute Lymphoblastic Leukemia and Multiple Myeloma. 

The cost for cancer treatment is high, with chemotherapy that can range from $10,000 to over $100,000 per cycle and immunotherapy often costs $100,000-$200,000+ annually. In treatment to treat ALL cost varies depending on phase of care, highest being during initial treatment. In pediatrics the care cost can roughly hit $394,000+ in the first 36 months, with 64% incurred in the first 8 months. This cost can and will be higher in patients over the age of 10 due to relapses and hospitalization cost. 

Relapse/Refractory can exceed $500,000+ for second line of treatment. Immunotherapy/CAR-T therapies can have a total treatment cost that can exceed $600,000+.

MM treatment is particularly expensive, with drug costs that exceed $100,000-$300,000+ per year and specialized CAR-T therapy that can reach over $400,000 per infusion. Also need to take into consideration any adverse effects/treatment complications that can approximately cost over $300,000+, which adds an additional cost to the total treatment. 

~ This analysis is informed by clinical expertise from OneDigital’s team, including Gladys Rosario, whose frontline perspective connects treatment complexity to plan risk, stop loss exposure, and overall budget impact. 

Understanding the Treatment Path: From Chemotherapy to CAR-T 

The treatment journey starts with standard induction therapies, chemo/immunotherapies, which serve as a vital preparatory and or maintenance steps for managing these diseases and then may be followed or proceed to more specialized and intensive cellular therapies like stem cell transplant or CAR-T-cell therapy. Stem cell transplant focuses on replacing damaged bone marrow to “reset” the immune system, CAR-T-cell therapy genetically modifies a patient’s own T-cells to specifically target and destroy cancer cells. There is an initial transitioning period from initial treatment to advanced therapy, this involves a 3 to 6 month of combination of targeted drugs, chemotherapy, and steroids to achieve disease control. 

There is a process for stem cell transplant that follows a very structured timeline that focuses on marrow preparation and recovery. When patients respond well to initial therapy they may proceed to an autologous SCT to consolidate remission. This process involves high-dose chemotherapy followed by a “rescue” using their own stored stem cells. If the patient’s cancer remains active even after chemotherapy, an allogeneic transplant, using donor cells, may be used to generate a new immune response against the cancer. 

For CAR-T-cell therapy is often considered and or reserved for patients whose cancer has not entered in remission from prior therapies, refractory, or the cancer has come back after treatment, relapsed. 

What Employers Should Do Next to Manage Cancer Claim Risk 

Employers should work with their benefits consultant to proactively review stop loss coverage, assess emerging risk factors, and explore innovative risk management strategies to mitigate the financial impact of high-cost cancer claims and risk liability.

The best strategies are the ones that protect both the member and the plan. That means understanding the clinical path of treatment, anticipating where costs may rise, and making sure stop loss protection is structured to respond appropriately when high-cost cancer claims occur. 

Connect with a OneDigital Stop Loss Expert to assess your renewal strategy and provide clinical and underwriting insights to protect your self-funded budget.