My employer offers a self-insured health insurance plan. What is it and is it a good deal for me and my family?
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Asked March 5, 2012
Large employers sometimes elect to set up an in-house group health care plan rather than join a plan offered by an outside health insurance company. The concept of doing so is to provide employees with quality health care without paying the extra amount typically used to pay for the operational expense of the insurance company who issues the plan.
Companies which set up private health plans generally offer a higher level of care than what is available through a third party insurer, and charge a lower cost per person. The health plan may be completely paid for by the employer or it may, as with a group health package, require the employee to make regular contributions. In either case, the total cost of the plan is typically lower than purchasing health care through a third party corporation which handles the administration of the plan.
For the company, providing private health care can be a benefit or a nightmare. If the costs of the health care go beyond the anticipated costs, the company could be faced with large balances that must be paid out of the company coffers. If, on the other hand, the costs remain in balance, the company would be able to offer unparalleled care at a much lower rate.
Whether or not the private health plan will be a good deal for you depends on a number of factors. If you are in generally good health and rarely have need of medical attention, then you'll be pleased. If you require moderate to frequent medical care, the cost of participating in your employer-managed plan could rise, and you could even find yourself paying more for health care than if you had joined a group health plan offered by an insurance company. In most cases, this is a better option than group health insurance, but there is no easy way to say whether it will work out best for you and your employer without having a lot more information about the plan, the number of people involved and the overall health of the entire group being covered.
Answered March 5, 2012 by Anonymous