How is Fully Health Insurance Plans Different from Self Insurance Plans?

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How is Fully Health Insurance Plans Different
from Self Insurance Plans?
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The difference in a fully-insured financial
arrangement and a self-funded financial
arrangement has to do with who assumes the
insurance risk, plan characteristics, employer
size and market share.
Fully Insured
Risk In a fully-insured plan, the employer pays
a per-employee premium to an insurance company,
and the insurance company assumes the risk of
providing health coverage for insured events.
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Plan characteristics In fully-insured
arrangements, premiums vary across employers
based on employer size, employee population
characteristics, and health benefit use. Premiums
can also change over time within the same
employer because of changes in the demographics
of the employed group as well as benefits used.
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inancial-arrangement/
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Self Insured
Risk In a self-insured plan, instead of
purchasing health insurance from an insurance
company and paying the insurer a per-employee
premium, the employer acts as its own insurer.
In the simplest form, the employer funds the
projected claims and fixed costs and has a Third
Party Administrator (TPA) that pays the claims
directly to the providers. The employer bears the
risk associated with offering health benefits.
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Self Insured
Plan characteristics In a self-funded
arrangement, there are no premiums to pay other
than the monthly fixed costs for administration
and reinsurance. The employers responsibility is
to fund the actual claims paid that week/month
through the TPA.
Deciding which financial arrangement is right for
the employees at your North Carolina company can
be complicated. Choose Independent Benefit
Advisors when it comes time to decide on a
financial arrangement for your group
in Raleigh, Durham, Asheville, Winston-Salem, Wilm
ington and elsewhere in North Carolina.
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Contact Independent Benefit Advisors
Phone [phone] Toll Free (888)
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