The difference between commercial and self-funded insurance plans is in how the benefits provided to the policyholders are:

Answer: The correct answer is: The main difference is the way in which each type of plan finances the benefits.

Explanation: Self-insurance is attractive to employers because it has a tendency to be less expensive than the insurance acquired and it gives them greater control over plan design. Savings accrue in a variety of ways, which include not having to pay State-levied premium taxes and exemption from offering State-mandated benefits.