# How does FAANG offer top health benefits?

Source: https://www.getprescience.com/guides/how-does-faang-offer-top-health-benefits
Author: Aditya Jain, MD, Cofounder and COO, Prescience
Published: 2026-10-09
Updated: 2026-10-09

Big tech companies don't buy better insurance. They don't buy insurance at all for most of their spending. They self-fund: they pay employees' claims directly, hire an administrator and keep what they don't spend. 80% of covered workers at large firms are in self-funded plans. That model, not a bigger budget alone, is why their deductibles are lower and their benefits richer.

- **Large-firm workers in self-funded plans:** 80% (KFF, 2025)
- **Average deductible, large firms:** $1,670
- **Average deductible, small firms:** $2,631
- **Large firms offering coverage:** 97%

## The secret is self-funding

When a large company self-funds, there's no premium going to a carrier's profit margin. The company pays the actual cost of its employees' care, plus a fee to an administrator (often the same carriers, acting as administrators). It keeps every dollar of savings, sees its own claims data and can design the plan however it wants under federal ERISA rules.

KFF's 2025 survey shows the gap clearly: 80% of covered workers at larger firms are in self-funded plans, compared with 27% at firms with 10–199 workers. The average deductible at larger firms was $1,670; at small firms, $2,631.

_Chart: Bar chart comparing the 2025 average deductible at large firms, $1,670, with small firms, $2,631._

## What large employers layer on top

- **Low deductibles and out-of-pocket maximums,** because the savings from self-funding go back into the plan.
- **Navigation and advocacy** so employees get to the right doctor the first time.
- **Direct contracts and centers of excellence** for expensive procedures, at negotiated prices.
- **Coverage choices smaller plans skip.** KFF found 43% of firms with 5,000 or more workers cover GLP-1 drugs for weight loss.

## Why startups usually can't copy it

Self-funding works at scale because thousands of employees average out. A 20-person company can have one premature birth or cancer diagnosis that costs more than its whole expected year. Small employers who self-fund buy stop-loss insurance to cap that risk, but stop-loss carriers underwrite your group, and some states restrict it: New York bans stop-loss for small groups entirely.

When I was at Harvard Medical School, I watched residents on rounds step around broken workflows and mutter that someone should really figure this out. It's a big part of [why I didn't apply to residency](https://opmed.doximity.com/articles/why-i-didn-t-apply-to-residency-and-what-i-m-doing-instead). Health benefits for small companies felt the same way to me: everyone knew the big-company model worked better, and nobody had made it work for a team of 20.

## How a startup can get the FAANG model

We built Prescience so a 10- or 50-person company can offer the kind of plan big tech offers.

At Prescience, we design and run your company's health plan, from setup and enrollment to claims, compliance and COBRA. What your team gets:

- **An effective $0 deductible,** so the plan helps from the first visit.
- **Simple copays** shown before a visit, capped by a low out-of-pocket maximum.
- **A broad national PPO network,** plus providers we contract with directly.
- **24/7 physician-led care navigation:** a care team that finds the right provider, books appointments and explains costs up front.

What your company gets: one monthly cost set in your quote, usually 10–20% below comparable fully insured coverage and fixed before the plan starts, with no admin fees. You keep your payroll provider, and the plan can start mid-year.

The result is the plan design big companies offer, an effective $0 deductible, a low out-of-pocket maximum and real help using care, at a cost fixed in your quote.

## Frequently asked questions

**Do big tech companies self-fund their health insurance?**

Most large employers do. KFF's 2025 survey found 80% of covered workers at larger firms are in self-funded plans.

**Why are deductibles lower at large companies?**

Self-funding removes carrier margin and lets the employer put savings back into the plan. KFF found average deductibles of $1,670 at large firms versus $2,631 at small firms in 2025.

**Can a small company self-fund like a large one?**

Traditional self-funding is risky for small groups and restricted in some states. Prescience gives small companies big-company benefits at a cost fixed in their quote, without that risk landing on them.

## Sources

- [KFF, 2025 Employer Health Benefits Survey](https://www.kff.org/health-costs/2025-employer-health-benefits-survey/)
- [U.S. Department of Labor, ERISA](https://www.dol.gov/general/topic/health-plans/erisa)
- [New York Insurance Law § 3231 (stop-loss for small groups)](https://www.nysenate.gov/legislation/laws/ISC/3231)
- [Aditya Jain, "Why I Didn't Apply to Residency … and What I'm Doing Instead" (Op-Med)](https://opmed.doximity.com/articles/why-i-didn-t-apply-to-residency-and-what-i-m-doing-instead)
- [Aditya Jain, "Contra Residency"](https://adityajain42.substack.com/p/contra-residency)