Fully Insured Health Plan

What Does Fully Insured Health Plan Mean?

A fully insured health plan is a type of health insurance where an employer pays a fixed premium to an insurance company to provide coverage for a specific number of employees. This differs from self-funded plans, where the employer assumes the role of the insurer and directly covers employee healthcare costs.

Insuranceopedia Explains Fully Insured Health Plan

In fully insured plans, the health insurance company manages all administrative tasks and pays all claims. In contrast, with self-funded insurance policies, these responsibilities typically fall on the employer. Fully insured plans are often more expensive due to regular premium payments. However, self-funded plans can be more challenging for employers to manage, as they must handle both claim payments and policy administration independently.