As an employer, choosing the right health insurance plan for your employees can seem challenging. There are typically two different options: a fully insured plan vs. a self-funded plan.
Each plan has different pros and cons. Taking stock of your priorities is a good place to start. Consider:
- Company size
- Health needs
- Budget
- Risk
- Employee experience
Once you have a good idea of what you can afford and what you’d like to cover for your employees, it’s time to choose your approach.
What is a fully insured health plan?
A fully insured health plan is what most people picture when they think of health insurance. The employer pays a premium to an insurance company. In return, the insurance company provides health coverage for insured events. Costs for the employer are more predictable than with a self-funded plan, reducing risk in uncertain times.
What is self-funded health insurance?
A self-funded (or self-insured) health plan is when the employer acts as its own insurer. The employer assumes most or all costs of benefit claims. In most cases, employers usually contract with an another company to administer their self-funded plan. This “third-party administrator” (TPA) manages certain functions, such as processing medical claims and facilitating enrollment.
Employers who choose to self-fund typically pay for a stop-loss insurance policy. This policy covers larger-than-expected healthcare costs and catastrophic claims.
Self-funded plans offer several potential benefits, including cost savings and the potential for a more customizable plan structure.
Find the funding model that works for you
Select Health offers fully insured and self-funded plan options. We also have hybrid funding options, such as contingent funding, to better align with employers’ risk tolerance.
Our sales reps work closely with you to understand your company’s financial priorities and employee needs to provide opportunities for cost savings.
Call our sales team at 801-442-5320 today to see how Select Health can help you find the right insurance plan for your company.
This article is intended for informational purposes only and is not legal or medical advice. Links to other sites are provided as a convenience, but Select Health does not endorse the third-party sites, information, or services.
The content included here is for your information and not a substitute for professional medical advice. It should not be used to diagnose or treat a health problem or disease. Please consult your doctor if you have any questions or concerns. Additionally, this information does not guarantee benefits. To review your benefits, please reference your plan materials or call Member Services at 800-538-5038 weekdays, from 7:00 a.m. to 8:00 p.m., and Saturday, from 9:00 a.m. to 2:00 p.m., closed Sunday. TTY users call 711.
Related Articles
