What is a fully insured health plan?
A fully insured health plan is a traditional type of insurance option sponsored by an employer. The employer pays monthly and yearly premiums to the insurance company, with fixed annual amounts based on how many employees are enrolled in the health plan. The monthly premium changes if the number of employees enrolled in the plan changes. Policies are different, depending on what the employer purchases, and the insurance carrier pays any health care claims based on that policy’s limit. Employees and their dependents are required to pay co-pays and deductibles for services that are included in the fully insured health plan.
Learn more about a fully insured health plan
When do I need to be aware of a fully insured health plan?
As an employer, you should be aware of a fully insured health plan and the benefits it can have for your company and your employees. While this type of plan is generally more expensive, it typically pays off in the end when executed correctly. It also attracts a greater pool of potential employees so employers can be picky about who they hire.
What Is important to know about a fully insured health plan?
Different insurance plans offer different benefits to both the employer and the employee. While a fully insured health plan may be inflexible, the benefits really stack up:
- Administrative expenses that generally accompany health insurance plans for employers are eliminated with a fully insured plan.
- Employees have the security of a predictable and safe benefit option when employers offer a fully insured plan.
- Because the insurance company deals directly with the claims, employers have a reduced risk and fewer responsibilities associated with insurance.
- A fully insured health plan allows companies to stay on budget because the cost stays the same unless the number of employees or other facts change.