Employer Self-Insured Health Plans

Self-insured, or self-funded, health plans selected by employers for their employees are an important part of remaining ACA compliant.

What is a self-insured health plan?
In self-insured health plans, the employer assumes the risk (financially) for providing health care benefits to employees. This means the employer would pay out of pocket for each claim as it occurred rather than paying an insurance carrier a fixed premium.

Why would an employer choose self-insured health plans?
There are various reasons for why an employer opts for a self-insured health plan. Some of the most common reasons cited for using self-insured health plans are:

• Employers can customize the plan to meet workforce-specific health care needs
• Employers maintain control over the health plan reserves, maximizing interest income
• Employers don’t have to pre-pay for coverage, providing improved cash flow
• Self-insured plans are regulated under federal law, so employers aren’t subject to conflicting state health insurance regulations
• Employers are free to contract with providers (or the provider network) best suited for their individual employees

So does that mean self-insured plans are the best for every employer?
Not necessarily. Self-insured employers assume the risk for paying employee costs for health care claims, which means it must have the resources available for unpredictable financial obligations.

Is there any way for an employer to protect itself against unpredicted claims with self-insured plans?
Yes. Most large and applicable large employers will have sufficient enough reserves to cover practically any health care cost. Other self-insured employers can also purchase stop-loss insurance, which will reimburse them for claims above an agreed upon dollar level.

Are there laws on self-insured health plans with which employers need to comply?
Yes, any federal law applicable to self-insured group health plans must be followed by employers, in addition to state-specific laws that may apply. Federal documents that outline self-insured group health plan compliance include:

• Age Discrimination in Employment Act (ADEA),
• Americans with Disabilities Act (ADA),
• Civil Rights Act,
• Consolidated Omnibus Budget Reconciliation Act (COBRA),
• Employee Retirement Income Security Act (ERISA),
• Health Insurance Portability and Accountability Act (HIPAA),
• Pregnancy Discrimination Act, and
• Various budget reconciliation acts, including Tax Equity and Fiscal Responsibility Act (TEFRA), Deficit Reduction Act (DEFRA), and Economic Recovery Tax Act (ERTA).

If you’re ready to report the offers of self-insured coverage you made in 2015, ExpressIRSForms is ready to help you e-file! Just create an account to get started. If you need any assistance, we’re in the office Monday through Friday, 9:00 a.m. to 6:00 p.m. EDT, and are available by chat and phone (704-684-4751). We also provide after-hours email assistance at support@ExpressIRSForms.com.



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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.

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