[shimon]

Yes they also typically buy reinsurance (insurance that covers individuals whose claims exceed some amount in a given year, like say $150,000). The company will have some people in HR who administer this program but they aren't duplicating a lot of what the insurance companies do -- that's why they pay for administrative services.

They rarely have actuaries on payroll but there are several boutique actuarial consultant who serve these companies (e.g. "given the geographical distribution of your employees and the higher use of services X, Y, Z, you would save $xxx if you choose insurer A over insurer B").