I am not so sure that the Arguments above make sense....here is why: It most certainly is insurance. Employers purchasing Self-funded coverage for their employees pay the ins. co. to be their claim processor (so to speak) and the Ins.Co. uses the Employers funds to pay claims. This is not Insurance, per se. To prove the point these plans are not subject to state mandated health ins. benefits.
When an employee incurs expenses beyond what the self-funded plan covers, the Employers fully insured stop loss coverage kicks in and benefits are then paid for with the Ins.Co. funds vs the Employers funds. In essence, this is where the coverage becomes insurance.