Health Care Coverage: Self-Insured v. Fully-Insured

There are two main types of health plan employers need to consider when setting up the coverage they’ll over their employees: self-insured (or self-funded) and fully-insured.

The big difference between the two is in self-insured health care coverage plans, the employer assumes financial risk for the employees’ benefits, paying the claims out of pocket rather than a fixed premium to the insurance carrier, like fully-funded plan providers do. Read on to learn a little more about the more specific differences between the two plans.

Self-Insured Plans
Rather than purchasing a fully-insured plan from an insurance carrier, employers who choose a self-insured plan are opting to operate their own health plan. These employers are generally larger ones and benefit from this type of plan because it allows them to save on the premiums insurance companies charge for fully-funded plans. It can be risky, though, because the employer will end up paying more out of pocket if more claims than are expected need to be paid.

Fully-Insured Plans
A fully-insured health plan is the more traditional option for employers, especially if you’re on the smaller end of the ALE scale. For this type of plan, the employer agrees on a fixed premium each year, paid to the insurance company based on the amount of employees the employer has enrolled. The insurance carrier will then pay any health care claims throughout the year, and employees are responsible for any deductibles or co-pays required for services.

Now that you’ve got your ACA-compliant health care coverage, do you know how you’re filing your forms? ExpressIRSForms now offers e-filing for ACA Forms 1094 and 1095, or you can check out ExpressACAForms for our full-service e-filing option.