If your company cannot afford to pay $1M insurance claims, you shouldn't be in the business of insuring medical coverage. You should be re-insuring that risk. There are many companies that will be happy to do this for you.

The fact that apparently AOL is on the hook for medical claims by its employees indicates they've made a reasoned judgement that their risk pool is diverse enough that it's worthwhile to self-insure, or they're incompetent.

Either way, it's crazy to set yourself up as an insurer and then complain about having to pay claims. That's kind of the point.