Health Plan Differences: Understanding Self-Funded vs. Fully Insured
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Article Summary
For companies that must deal with how best to handle health insurance costs, a decision needs to be made on whether they choose to be fully insured or self-insured. Use this infographic to compare and contrast the main differences of each plan to determine the best fit for your company.
For companies that must deal with how best to handle health insurance costs, a decision needs to be made on whether they choose to be fully insured or self-insured. Use this infographic to compare and contrast the main differences of each plan to determine the best fit for your company.
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| SELF-FUNDED | The employer does not pay premiums; instead, it pays fixed cost (administrative fees and stop loss premiums) and variable costs (employee health care claims) | The employer assumes the risk. | Employers have more control and freedom in their plan designs. | The Employee Retirement Income Security Acts of 1974 (ERISA) pre-empts state regulations. |
|---|---|---|---|---|
| VS. | PAYMENTS | ASSUMPTION OF RISK | PLAN DESIGN | COMPLIANCE PAYMENTS |
| FULLY INSURED | The employer pays monthly premiums to an insurance carrier. | The insurance company assumes the risk. | Employers are more limited by insurers' plan design options. | The plan most comply with state regulations. |
Publish Date:Jan 8, 2017Categories:Employee Benefits