Fully Insured Plans in Canal Fulton, OH, Canton, OH, North Canton, OH, Massillon, OH and the Surrounding Areas.
If you’re looking to offer a group health plan to your employees, you’ve probably heard of the terms “fully insured” and “self-insured.” These terms describe the two main types of health insurance plan designs that employers can offer their employees. In some cases, these plans may be referred to as “fully funded” or “self-funded” plans, respectively. A plan design that combines the two is known as a level-funded plan.
The main difference between the plan types deals with who is funding the plan (i.e., the carrier or the company), how claims are paid out, and additional fees.
Distefano Insurance Services, Inc. is your guide into determining which plan-funding mechanism will best suit the needs of your employees and your bottom line. Contact us today at 330.854.6637 to get started.
What Are Fully Insured Health Plans?
A fully insured health plan is what comes to mind when many people think of group health plans. With a fully insured health plan:
The company pays a premium to the insurance carrier.
The premium rates are typically fixed for a year, based on the number of employees enrolled in the plan each month.
The monthly premium typically 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 purchased policy.
Benefits of Fully Insured Plans
Fully insured plans, while typically more expensive, often offer employers increased protection from high claims costs. Although employers may not have complete control and customization ability of a fully insured plan design, the predictability of monthly expenses can help employers provide quality health insurance to employees.
Differences Between a Fully Insured and Self-insured Plan
Unlike a fully insured health plan, self-insured plans can be more cost-effective for certain employers but often involve more risks. Employers operate their own health plan with a self-insured plan instead of purchasing a fully insured plan from an insurance carrier. Employers choose to self-insure partly 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 can expose the company to a much larger risk if more claims than expected must be paid.
Which Is Right for You?
Determining whether a fully insured, self-insured or level-funded plan is right for you can be a daunting task. Fortunately, we’re here to help. Contact Distefano Insurance Services, Inc. today so that we can help you evaluate your employee benefits needs and find the health insurance solution that’s right for you and your employees.