Employee Benefits

A Fully-Insured is the more traditional way to structure an employer-sponsored health plan. With a fully-insured health plan:  The company pays a premium to the insurance carrier.  The premium rates are fixed for a year, or month-by-month, based on the number of employees enrolled in the plan each month. The monthly premium only changes during the year if the number of enrolled employees in the plan changes.The insurance carrier collects the premiums and pays the health care claims based on the coverage benefits outlined in the policy purchased. The covered persons (eg: employees and dependents) are responsible to pay any deductible amounts or co-payments required for covered services under the policy.  Generally, Fully-Insured Plans involve less risk, and are more stable.

With a Self-Funded health plan, employers (usually larger groups) operate their own health plan through their carrier of choice as opposed to purchasing a fully-insured plan from an insurance carrier. Employers choose to self-insure because it allows them to save the profit margin that an insurance company adds to its premium for a fully-insured plan. However, self-insuring exposes the company to much larger risk in the event that more claims than expected must be paid.