Benefits Of Insurance And Self Insured Employers

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When it comes to explaining fully-insured versus self-insured employers it is important that we have an accurate understanding of the definitions of and differences between the two. According to benefits communication expert Jennifer Benz of Benz Communications in San Francisco “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.” There are different risks involved with both types of plans. Typically, smaller companies with fewer employees opt for fully-insured plans and larger companies with 5000 or more employees opt to be self-insured. According to the Employee Benefits Research Institute (EBRI) “in 2008, 88 percent of workers in firms with 3-199 employees were in fully insured plans” and “89 percent of workers employed in firms with 5000 or more employees were in self-insured plans.” (MacDonald, 2009) The EBRI Fast Facts paper goes on to say overall for that same year 45 percent of workers in the health insurance market share were covered by fully-insured plans versus 55 percent for self-insured plans. Historical data on the effect of employee wellness programs on productivity includes measuring absenteeism, workers’ compensation absences, short- and long-term disability outcomes, as well as
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