Often confused with self-insurance, a self-funded health care plan is funded entirely by the employer. A self-funded plan may be self-administered, or the employer may contract with an outside administrator for an administrative services only arrangement. Self-funded plans obtain stop-loss insurance to cover catastrophic illnesses.
An arrangement under which some or all of the risk associated with a benefit plan is not covered by an insurance contract. The plan sponsor is responsible for that portion of the risk that is not insured.
In a self-funding health benefit plan, the employer sponsors a plan typically funded by contributions from the employer and employees.
A health care program in which employers fund benefit plans from their own resources without purchasing insurance. Self-funded plans may be self-administered, or the employer may contract with an outside administrator for an administrative services only (ASO) arrangement. Employers who self-fund can limit their liability via stop-loss insurance on an aggregate and/or individual claim basis.
A program for providing employee benefits financed entirely through the employer, in place of purchasing such coverage from a commercial carrier.
The method providing employee benefits in which the group does not purchase conventional insurance but rather elects to pay for the claims directly (generally through the services of a TPA) with Stop Loss insurance in place to cover abnormal risks.
or Self-Funded Plan - Employer or organization assumes complete responsibility for health care losses of its covered employees. This usually includes setting up a fund against which claim payments are drawn and claims processing is often handled through an administrative services contract with an independent organization. In this case, the employer does not pay premiums to an insurance carrier, but, rather pays administrative costs to the insurance company or health plan, and, in essence, treats them as a third party administrator (TPA) only. However, the employee may not be able to detect any difference because the plan description and membership card may carry the name of the insurance company not the employer. Same as Self-Insured, see below.
The method of providing employee benefits in which the group does not purchase conventional insurance but rather elects to pay claims directly (generally through the services of a TPA) and purchase stop loss insurance to cover abnormal risks and claim fluctuations.
An arrangement under which all or some of the risk associated with providing coverage is not covered by an insurance contract.
The practice of an employer or organization assuming responsibility for health care losses of its employees. This usually includes setting up a fund against which claim payments are drawn and claims processing is often handled through an administrative services contract with an independent organization.