What is a Self-Insured Health Plan?
In a self-insured group health plan, a company provides group health care insurance directly to its employees rather than through purchased coverage from an insurance provider. In the United States, about one-third of all workers receive health benefits from self-insured plans. Tailored Plans Self-insuring health care lets an employer create a tailored plan to meet the specific needs of his employees (as opposed to purchasing a “one-size-fits-all” health plan). From an employee’s point of view, a self-insured group health care plan has the same look and feel as an outsourced plan. Law of Numbers The Law of Numbers, sometimes called the law of averages, says the larger the size of a group, the closer statistical projections of that group’s behavior will match its future state. When a company has a sufficiently large number of employees, it can use the Law of Numbers to determine the future cost of health care–a requirement for self-insuring. Accurate Projections Self-insuring requires
