A growing number of U.S. employers are making the switch to self-insuring as a way to reduce costs and improve service.
What is self insurance?
According to the Self-Insurance Institute of America, Inc., a self insured group health insurance plan (or self-funded plan) is when an employer assumes the financial risk for providing health care benefits to its employees. Rather than paying a fixed premium to an insurance carrier, an employer pays out-of-pocket expenses as incurred.
Employers can be partially or fully self-insured and set up a trust fund.
Self-insured group health plans are governed by a variety of federal laws including, but not limited to: ERISA, HIPAA, COBRA, the U.S. tax code and federal anti-discrimination laws such as the ADA.
Self-insuring or self-funding is not right for every organization. Employers considering a switch from fully funded to self-funded health plans should analyze the advantages and disadvantages before making the switch.
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Simply call us at (732) 747-0411, or send us an email using the contact form on this page. We’ll gladly tell you about self insured group health insurance options that may be right for your business.