Advantages of Self-Funded Health Plans for Small Businesses Why Small Businesses Should Think About Self-Funded Health Insurance Plans. Health insurance costs are going up every year, much faster than the overall cost of living. This affects both employers and employees, making them pay more for insurance. If this keeps happening, by the year 2055, the cost of health insurance for an average family could be higher than their average earnings. Why Small Businesses Should Think About Self-Funded Health Insurance Plans Many small to medium-sized businesses believe that they have no choice but to stick with traditional health insurance plans where they pay premiums to an insurance company.