Nearly a quarter of every health care dollar spent in the U.S. is waste: unnecessary tests, administrative bloat, inflated prices, according to the National Academy of Medicine. When an employer manages to cut even a slice of that waste, the money either stays in the company’s account or vanishes into a carrier’s margin. Which direction it goes turns on one thing: who administers the plan.
That question gets less attention than it should during renewal season. Brokers and CFOs compare networks, stop-loss attachment points, and per-employee-per-month fees. But the administrative structure of the health plan itself determines where the dollars actually go when a benefit like WellthCare starts shifting care to lower-cost settings and reducing claims.
What fully insured actually means for your cash
A fully insured plan runs on a premium model. The carrier projects claims and expenses, sets a rate, and the employer pays it. The carrier takes the risk, processes the claims, and keeps whatever profit remains after medical costs and overhead are covered. When claims rise, the employer faces a rate hike at renewal. When claims drop, for instance because employees use a supplemental benefit that covers preventive care at $0 copays, the carrier’s margin widens. The employer might get a flat renewal next year, but the actual dollar savings from the lower claims experience stay inside the insurance company. The employer financed the risk reduction. The carrier captured the reward.
Why self-funding returns the savings
Self-funded plans flip the cash flow. The employer pays claims as they come, not a fixed premium. A third-party administrator (TPA) handles claim processing, network access, and compliance for a flat fee or a per-employee charge. Stop-loss insurance caps the downside risk on large individual claims or aggregate spikes. But the upside is simple: every dollar not spent on a claim stays with the employer. About 60 percent of covered workers are in self-funded plans, per the Kaiser Family Foundation’s 2024 employer health survey. For most midsize and large companies, self-funding the primary medical plan is standard practice. What they rarely examine is what happens when they add a benefit that systematically lowers claims, and who ends up with the freed-up cash.
The incentive gap most people miss
Carriers are built to maximize the spread between premium revenue and claims paid. That’s their fiduciary obligation to shareholders. A TPA sells administration. It has no financial stake in whether your medical spend rises or falls beyond its contractual fees. This isn’t a conspiracy; it’s a structural difference. Introduce a program that moves care to less expensive settings or prevents high-cost claims, and a TPA passes the cash difference straight to the plan sponsor. A carrier improves its loss ratio and keeps the surplus. Same benefit, same reduction in unnecessary claims, two completely different destinations for the savings.
Where WellthCare fits into this math
WellthCare™ is a Health-to-Wealth™ Benefit System that works alongside your existing health coverage. Employees get $0-co-pay care for a defined set of services: telehealth, primary and urgent care, diagnostics, mental health support, and prescription services. They earn reward dollars at the WellthCare Store™ for completing verified preventive actions like screenings, biometric scans, and annual physicals. The employer commits the savings from lower claims to fund automatic retirement contributions for each participant. It’s a system where healthcare pays you back.
WellthCare gets used before the primary plan. Every covered preventive screening, telehealth visit, or lab draw that routes through WellthCare never lands on the main medical plan’s claims feed. Only 8 percent of U.S. adults receive all recommended preventive services, according to a 2018 Health Affairs study. The volume adds up. When instant, spendable rewards change that behavior, the number of claims a primary plan never sees grows fast. A 500-life group that cuts avoidable claims by a few percentage points can free up tens of thousands of dollars in a year. The question is who ends up holding that cash.
What the difference looks like in practice
Under a fully insured carrier, those tens of thousands become part of the carrier’s improved claims experience. You might negotiate a smaller renewal increase next year, but the actual dollar surplus stays with the insurer. You can’t redirect it into employee retirement accounts, can’t use it to lower next year’s costs dollar for dollar, and can’t show employees a visible, compounding benefit they feel every pay period.
Under a self-funded plan administered by a TPA, the picture changes. Each avoided claim is a payment you never make. The cash stays on your balance sheet, available to fund WellthCare retirement contributions that appear in every employee’s account. Self-funding gives you an account where savings actually land. Fully insured does not. The difference compounds. Every year of successful prevention and first-dollar redirection through WellthCare reduces the primary plan’s claim outflow, and every dollar that stays put can be reinvested in retirement contributions that grow tax-deferred for decades. Employees see their Store rewards and a growing retirement balance tied directly to preventive actions they took. The employer sees a lower claims trend and retention numbers that reflect benefits people actually use.
Proof you can act on
WellthCare includes a patent-pending analytics tool called the WellthCare Readiness Index™. After 6 to 12 months of real usage, the Index shows the employer exactly how much was saved, and when and by how much further expansion would increase those savings, using the employer’s own claims data. No actuarial models, no industry averages, no marketing guesses.
The real cost of choosing wrong
Brokers and benefits teams comparing TPA and carrier proposals should go beyond network discounts and administrative fees. They should model what happens when a benefit like WellthCare succeeds. If your plan structure returns savings to you, the benefit creates a cycle that feeds itself: healthier employees, lower claims, growing retirement wealth, higher retention. If the structure sends savings to the carrier, the benefit still works for employees-they get the $0-copay care and Store rewards-but your financial return is indirect at best. Every employer wants benefits that reduce costs and that employees actually value. The administrative layer beneath those benefits decides which of those two outcomes gets the cash. Self-funding with a TPA turns avoided claims into funded retirement contributions. Fully insured turns them into someone else’s margin.
See what a WellthCare Plan would look like for your team.
This article is for general information only and is not legal, tax, or medical advice. Employers should consult their own advisors.