Skip to main content
Home
Segal Benz

Search form

  • What We Do
    • Our Work
    • Who We Serve
  • About Us
    • Team
    • Press
    • Speakers
    • Industry Insights
    • Careers
  • Insights
    • Blog
    • Resources
    • Coronavirus Resources
    • Events
    • Our Approach
  • Contact
hamMENU

You are here

Segal Benz  >  Insights  >  Blog  >  Self-insured vs fully-insured medical plans
June 05, 2008

Self-insured vs fully-insured medical plans

Jennifer Benz
SVP Communications Leader

Why your employees should know the difference

One of the many many ways that the health insurance market doesn’t act like “real” insurance is through the use of self-insured plans by most large employers. When a plan is self-insured, it means the employer is paying all of the health care costs plus administration costs—not “just” premiums.

Here’s the difference:

If an employer-sponsored plan is fully-insured, the insurance company is ultimately responsible for the health care costs and the employer pays premiums.

If an employer-sponsored plan is self-insured, the employer is ultimately responsible for the health care costs, and pays for all of those costs plus administration fees.

If your plans are self-insured, your employees should know it and they should know why.

Many companies move to self-insured plans once they reach a specific size because it becomes less expensive for them to pay for all of the medical expenses than to pay the premiums required by the insurance company to take on the risk. If this is the case for your company, you should not be shy to communicate that information to your employees. Your employees should know that their company—not the insurance company—is picking up the bill for all of those costs. And, they should know that the insurance carrier is responsible for negotiating rates with in-network providers and processing claims.

The trick in communicating this information is to keep it relevant to individual employees. Don’t overwhelm your employees with mind-numbing figures about how much the company spends on medical costs. Do speak to them honestly about how the medical insurance market works and how small changes—like using generic prescription drugs instead of brand name drugs—do make a difference in the big picture.

Read next: 
What to tell your employees about health care reform: Key topics, messages and timing for your benefits communication
Gearing up for 2014: The looming health care reform provisions and your employee communication
Literacy requires common language and understanding—how to increase your employees’ health literacy

Get Email Updates

Find out instantly when we post new insights to the blog!

SUBSCRIBE

Explore & Learn

Explore our library of free resources

LET'S GO

Read next: 
What to tell your employees about health care reform: Key topics, messages and timing for your benefits communication
Gearing up for 2014: The looming health care reform provisions and your employee communication
Literacy requires common language and understanding—how to increase your employees’ health literacy
  • What We Do
  • About Us
  • Insights
  • Contact
  • Privacy
  • California Residents
  • Disclosure of Compensation

Work With Us

We partner with organizations that value their people first.

LET'S TALK

 

Meet the Family

We are proud to be part of the Segal family.

Segal | Segal Marco Advisors | Segal Canada

Segal Benz
180 Howard Street
Suite 1100
San Francisco, CA 94105
415-263-8200
© 2008–2023
LinkedIn Profile
Twitter Profile
Facebook Profile