Self Insured Health Plans: Self Insuring for Employers

Does your employer offer a self-insured health insurance plan (self insuring)? What does this mean? Would this type of plan benefit the employee or the employer?

Most large corporate employers in these days own their own health insurance plan. This differs greatly to past employers who would purchase coverage directly from an insurance company (Fully Insured Plans). Typically the large employer pays a third party administrator (TPA) (such as an insurance company or other administrator of health care claims) to administer the plan which they have designed for their employees - the large employer pays the costs (claims plus administration) directly out of the company's coffer. While the large employer saves the profit margin that an insurance company builds into its premium, it raises the exposure of the large company to greater risk in the event that more claims than anticipated must be paid. Due to the nature of these plans (and tight regulation of such plans), most self-insured employer-sponsored plans are very efficient and provide good health insurance benefits to employees. If you are not self insured or even partially self insured, you should find a health and welfare benefit consultant that can design your self insured plan to specifically meet the needs of your vision.