The fully-insured baseline
On a fully-insured plan, the employer pays a fixed premium. Claim reduction shows up indirectly: a quieter claim year produces a more favorable experience-rated renewal the following year. The lag is real, the effect is muted, and it can be eaten by trend.
The self-funded math
On a self-funded plan, every claim is a direct cost to the plan fund. Claim reduction shows up immediately on the fund's loss ratio. That has three compounding effects: lower in-year claim cost, lower stop-loss premium at renewal (stop-loss is experience-rated), and lower required reserves.
Where a SIMERP fits
Every primary care, urgent care, mental health, or routine Rx encounter that moves to the SIMERP-side stays off the self-funded plan's fund. For a 1,000-employee health system, that typically translates into 10-20% claim-line reduction on the categories that get displaced, which on a self-funded plan compounds through all three of the levers above.
A worked example
Take a 1,500-employee self-funded employer with $14M in annual claim spend. Migrate 12% of primary care, 8% of urgent care, and 5% of routine Rx claims to the SIMERP. Year-one direct claim savings: roughly $850,000. Year-one stop-loss premium adjustment: roughly $180,000. Reserve requirement reduction: variable, but typically another six figures. Plus the employer FICA savings the SIMERP itself generates.
Why brokers do not always surface this
Self-funded employers are typically served by ASO carriers and TPAs; broker compensation is structured around premium volume. A program that explicitly reduces premium volume and stop-loss spend is not always the broker's first recommendation. The structural compensation issue is worth understanding when evaluating whose advice you are taking.
What to model
Run a 3-year cash projection that includes: direct claim savings, stop-loss premium adjustment, reserve adjustment, FICA savings, and admin fee. If your business is self-funded with a typical claim mix, the numbers usually pencil out cleanly in year one and grow each subsequent year.