If your school recently opened a health insurance renewal notice and felt a little sick, you are not alone.
In Episode #72 of The Charter School Insider Podcast, Gary Clark — Employee Benefits K–12 National Segment Leader at HUB International, with 25 years in the industry — characterized the 2026 health insurance market as "a dumpster fire," with the highest single-year increases he has seen for employers across the board. Carriers have told HUB they are building 15–16% medical trend assumptions into their 2026 renewals — roughly double the ~8% trend of a normal year, according to Clark. His colleague on the episode, Kylie Hunter of Berkley Accident and Health, added that 2025 loss ratios came in around 91% across the industry, well above insurers' typical target of 76–79% — meaning carriers are pushing hard to recover margin at renewal. And the data Clark presented shows the number of million-dollar claimants rising roughly 15% per year.
He was not being dramatic.
But here is what most school leaders do not realize when that renewal hits: the plan structure you are currently using may not be the right one for your school's size. The fully insured plan that made sense when you had 40 employees is probably not the optimal structure once you have 120. And the options available to a network with 400 employees are meaningfully different from those available to a single campus with 65.
There is a spectrum of health insurance structures available to employers. Where your school sits on that spectrum — and which structure makes sense — is largely determined by how many employees you have. This guide breaks it down.
Before we get to the size guide, here is a plain-English overview of the four structures school leaders should understand.
The traditional model. Your school pays a fixed monthly premium to an insurance carrier, and the carrier assumes all financial risk for your employees' healthcare claims. You get predictability, but very little else. You have no visibility into your claims data, no flexibility to design your plan, and no mechanism to benefit if your employees happen to be healthy. At renewal, the carrier adjusts your premium based on their overall risk pool — not necessarily your school's specific claims experience.
A hybrid structure that sits between fully insured and fully self-funded. Your school pays a fixed monthly amount, but that payment is split into three components: expected claims, stop loss insurance, and administrative fees. If your claims come in below projections, you may receive a refund at year end. You also get access to basic claims reporting. Level-funded plans are now common among smaller employers — according to the KFF 2025 Employer Health Benefits Survey, 37% of covered workers at firms with 10 to 199 employees are enrolled in level-funded arrangements.
Your school pays claims directly as they occur, rather than paying a fixed premium to a carrier. A third-party administrator (TPA) processes your claims. You purchase stop loss insurance to cap your maximum financial exposure on both individual high-cost claimants and your total population's aggregate claims. In exchange, you get full transparency into your claims data, complete flexibility to design your plan, and the ability to deploy cost management tools. If your employees are healthier than average — which, as we will get to, school employees tend to be — you keep the savings rather than handing them to the carrier.
A captive is not a plan type in the way the others are — it is a specific structure for funding your stop loss coverage. In a group captive, a pool of employers bands together to collectively share a defined layer of risk that each employer could not take on independently. The HUB Charter Captive is a group captive purpose-built exclusively for charter schools, offered by HUB International with stop loss coverage through Berkley Accident and Health. If the pool performs well, the surplus stays within the captive rather than going to an insurer.
If your school has fewer than 50 employees, self-funding is generally not recommended. Kylie Hunter of Berkley Accident and Health is direct about this: "Really small schools, less than 50 employees, we don't typically recommend that those size of schools go self-funded… I would almost recommend against it."
The reason is mathematical. Self-funding works because you are paying only for the healthcare your employees actually use. But with a small population, a single catastrophic claim — one employee with a serious illness, a complicated pregnancy, a high-cost specialty drug — can represent a disproportionate share of your total healthcare spend. Even with stop loss insurance in place, the administrative complexity and financial volatility make the structure difficult to manage below this threshold.
What to focus on instead:
This is the transition zone where the limitations of fully insured start to become real budget problems, and where alternative structures begin to become viable.
At this size, your employee population is large enough to start producing meaningful claims data, but probably not large enough to absorb significant claims volatility on your own without protection. Level-funded plans and partially self-funded arrangements offered by major carriers are natural first steps.
Gary Clark notes that when HUB Charter launched in 2008, this was exactly the entry point they used: "We started educating charter schools about partial self-funding. They weren't really large enough to go self-funded on their own, but groups like Cigna, Anthem, United Healthcare — they offer these partial self-funded programs that were better than being fully insured."
The key advantages of moving to a level-funded or partial self-funded structure at this stage are transparency and optionality. You begin to see your actual claims data. You start understanding what is driving your costs. And if your school has a favorable health profile, you may see money come back at year end.
What to focus on at this stage:
This is where self-funding becomes the most financially compelling option for most schools. At 150+ employees, your population is large enough to absorb normal claims variation, your data is meaningful enough to drive real cost management decisions, and the savings potential of keeping what you do not spend starts to outweigh the complexity of running your own plan.
More importantly, this is the size range where the HUB Charter Captive becomes a strong candidate. According to data Gary Clark shared on the episode, member schools have achieved average savings of 22–26% relative to their prior programs since 2019 — an estimated $7.83 million in total savings across the captive's members. And Berkley's own portfolio data, presented by Kylie Hunter, shows that HUB Charter Captive members average 8.2% renewal increases — compared to 10.2% across all of Berkley's captive programs and 17% for Berkley's traditional (non-captive) stop loss business.
One common concern at this stage is risk. The board may push back. The CFO may worry about maximum exposure. Gary and Kylie both address this directly: stop loss insurance defines your maximum liability before the plan year begins — both on individual high-cost claimants and on total aggregate claims. As Kylie put it, "Your maximum liability, whether you're in a captive or traditional stop loss arrangement, is clearly defined for you from the get-go." The inverse risk is simply continuing to accept 15–20% compounding increases year over year with no ability to influence the outcome.
What to focus on at this stage:
At this scale, self-funding is close to the default right answer for a school network. The real differentiation at 300+ employees is not whether to self-fund, but how aggressively you use the cost management tools that self-funding unlocks.
Gary Clark describes what some of the most sophisticated charter schools in the captive have done: "The beauty of self-funding is to be able to put claim management tools in place that can actually reduce what you spend for that MRI we were talking about. And several of the charter schools have taken those steps and have had even greater success."
The MRI example is worth pausing on. As Clark explained on the episode, the answer to "how much does an MRI cost?" is: it depends on who is paying. The most expensive MRI in the system is the one an employer pays for through a traditional insurance contract — while a cash-pay patient at an outpatient facility might pay just 20% of what the carrier pays for the same procedure. Self-funding, at this scale, means your school can access alternative pricing mechanisms rather than being locked into the carrier's contract structure.
Beyond the episode, these are examples of the cost management tools self-funded employers at this size commonly deploy:
| Employees | Recommended structure | Key benefit | Watch out for |
|---|---|---|---|
| Under 50 | Fully insured | Predictability, simplicity | Blind acceptance of renewal increases |
| 50–150 | Level-funded or partial self-funded | Claims transparency, potential refund | Comparing only against incumbent carrier |
| 150–300 | Self-funded + stop loss; captive eligible | Savings potential, flexibility, pooled risk | Underestimating stop loss importance |
| 300+ | Self-funded + advanced cost management | Full cost control, data-driven strategy | Passive renewal approach |
Regardless of where your school falls on this spectrum, these are the questions that distinguish proactive benefits strategy from reactive renewal acceptance:
Do I know what is actually driving my healthcare costs? For most schools, the drivers are a handful of high-cost claimants, specialty drug spend, and the prices baked into the carrier's provider contracts — remember the MRI that costs five times more through a traditional insurance contract than cash-pay. On a fully insured plan, you cannot see any of this; the renewal arrives as one number. On a level-funded or self-funded plan, the data exists — the question is whether anyone reviews it. Ask your broker for an annual claims summary showing what share of spend came from your top claimants, what share went to pharmacy, and how your per-employee cost benchmarks against similar-sized schools.
Is my renewal increase based on my school's claims, or a broader risk pool? It depends almost entirely on your size. As Gary Clark noted on the episode, smaller groups are not big enough for their own claims to drive the renewal — the increase reflects what is happening across the carrier's broader risk pool, including employers whose workforces look nothing like a school's. The way to find out is to ask directly: "Is this renewal experience-rated or pool-rated, and can you show me the underwriting basis?" If the answer is pool-rated, your school's healthy year bought you nothing — and that is precisely the argument for moving toward a structure where your own experience counts.
What is my maximum financial exposure? In a self-funded structure, this number is defined before the plan year starts by your stop loss coverage: the specific deductible caps what you pay for any individual claimant, and the aggregate attachment point caps your total claims liability for the year. Your worst-case cost is the aggregate attachment plus your fixed costs — a single number your CFO can put in the budget. If you cannot state that number today, ask your broker or stop loss carrier to put it in writing. And if you are fully insured, your premium is your exposure — which sounds safe until you realize it resets 15–20% higher every year with no ceiling on where it goes.
Am I paying for other employers' bad luck? If you are fully insured or in a captive that mixes industries, quite possibly. Pooled rating means your premium reflects the claims of every employer in the pool — trucking companies, manufacturers, whoever shares it — regardless of your own population's health. Schools tend to have younger, healthier demographics than the general employer population, which is exactly why isolating charter risk in its own pool has produced better renewals in the episode data. Ask your broker two questions: what pool is my school rated in, and what do the demographics of that pool look like compared to my staff?
When did I last have a strategic conversation about my benefits — not just a renewal conversation? A renewal conversation reacts to a number; a strategic conversation happens months before that number exists and covers structure, not just price: What did our claims data show this year? Are we still in the right structure for our current headcount? What cost management levers are we not using? If the only benefits meeting on your calendar is the one where the increase gets presented, put a mid-year review on the calendar now — that is when you have leverage, because every alternative is still on the table.
Know your size band → Match the structure to it → Use the transparency it unlocks to manage costs year-round
The structures build on each other. Fully insured buys simplicity while you are small. Level-funded buys your first look at claims data. Self-funding buys control — and a captive multiplies that control by pooling risk with schools whose employee populations look like yours. Each step up the spectrum trades a little simplicity for a lot of leverage.
In a fully insured plan, the school pays a fixed premium and the carrier takes on all claims risk — but the school gets no claims data, no plan design flexibility, and no benefit if its employees are healthy. In a self-funded plan, the school pays claims directly as they occur (through a third-party administrator), purchases stop loss insurance to cap its exposure, and keeps the savings when claims come in low. The tradeoff is predictability versus control and transparency.
Full self-funding generally becomes compelling around 150+ employees, when the population is large enough to absorb normal claims variation. Schools with 50–150 employees can start with level-funded or partially self-funded arrangements as a transitional step. Below 50 employees, self-funding is typically not recommended — a single catastrophic claim can represent too large a share of total spend.
A group captive is a structure for funding stop loss coverage in which a pool of employers bands together to share a defined layer of claims risk that none of them could take on alone. Because the pool collectively purchases less insurance from the carrier, members gain transparency, more favorable renewals, and the opportunity to keep surplus when the pool performs well. Industry-specific captives — like one built exclusively for charter schools — add a further advantage: members are not subsidizing claims from industries with less favorable health demographics.
The risk is real but defined. Stop loss insurance sets a school's maximum liability before the plan year begins — both for individual high-cost claimants (specific stop loss) and for total population claims (aggregate stop loss). The board and CFO can know the worst-case number in advance. The alternative risk is accepting 15–20% compounding premium increases year over year with no ability to influence the outcome.
Several pressures are converging. Carriers have reported building 15–16% medical trend assumptions into 2026 renewals — roughly double a normal year, according to benefits advisors working with charter schools. Insurer loss ratios ran near 91% in 2025 against typical targets of 76–79%, pushing carriers to recover margin at renewal. And the frequency of million-dollar claims continues to climb, driven by high-cost specialty drugs, cancer treatments, and complex conditions.
School leaders who treat health insurance as a once-a-year administrative event are treating one of their largest budget line items — typically top three, behind salaries — as set-it-and-forget-it. With carriers building historically high trend assumptions into renewals and high-cost claims rising year after year, that approach carries a cost that will eventually crowd out instruction.
The size-based framework in this guide is a starting point — not a prescription. Every school's situation is different, and the right structure depends on more than just headcount: your current loss ratio, your board's risk appetite, your employees' health profile, and whether your leadership team has the bandwidth to engage strategically at renewal time all factor in.
What does not vary is the principle: the earlier you start understanding your options, the more leverage you have. The best time to explore a different structure is not the week your renewal lands.
If this guide raised questions about whether your school's current plan structure still fits its size — or whether your renewal reflects your school's actual claims experience — the next step is an honest look at where you stand, well before the next renewal lands.
🎧 Hear the full conversation with Gary Clark and Kylie Hunter on The Charter School Insider Podcast
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