The term "fully insured" may sound like an all-encompassing type of insurance, but the name is a bit of a misnomer. Fully insured employee health insurance refers to the traditional route of insuring employees where a company pays a premium to the insurance carrier. The carrier then handles healthcare claims based on coverage benefits that have already been established with the employer.
Employer and Employee Responsibilities in Fully Insured Plans
Parameters for employers who offer fully insured employer-sponsored health insurance typically include the following:
- Fixed monthly premium rate, revisited annually or if there is a change in the number of enrolled employees, whichever comes first.
- Employees and dependents are responsible for paying deductibles and co-pays for healthcare services that are covered under the fully insured policy.
- Employer administration of the plan instead of the insurance company.
- Premiums are collected by the insurance carrier who then pays healthcare claims based on the coverage benefits outlined in the company-purchased insurance policy.
Fully insured plans are, in general, more expensive for employers. When executed well, however, fully insured employee health insurance plans can save your company money while providing excellent benefits to employees. Premiums can vary depending on the type of policy that you choose for your company employees.
Keep in mind though that fully insured plans can be inflexible, which prevents employers from having much control over the design of a plan. However, as the employer is it your prerogative to require employees to pay a portion of the premium.
Benefits of Fully Insured Employee Health Insurance Plans
A fully insured option is common among small businesses as a fully insured plan eliminates the administrative expenses related to a health plan. Taking on the responsibility of health insurance and offering enrollment options to your employees provides a predictable and safe benefit for employees.
The risk to your company is reduced when the insurance company has the job of dealing with all employee claims. Companies who use fully funded plans pay a set premium price to the insurance carrier of their choice. And, if claims exceed projections after thorough vetting of employees, the insurance company assumes the financial risk instead of your enterprise.
Fully funded plans are also kind to budgets – the cost remains what your company and the insurance company have agreed it will be until the facts change (i.e., number of employees).
However, if the size of your organization increases (to 1,000 employees or more), a self-funded option may begin to make more sense, especially if employees generate a limited number of claims.
Determine the Best Group Employee Health Insurance for Your Company
There are many questions surrounding group employee health insurance. What will benefit your employees and give them the coverage they deserve without taxing your company too greatly?
At The Benefits Group, we make it our goal to help your enterprise find the insurance carrier that is just the right fit for your company based on number of employees, unique employee needs, the benefits you wish to provide or not provide, and more. Offering strong health insurance options to employees is a demonstration of your investment in each employee's contribution to your organization, but your health plan and financial business goals must coincide favorably to make a fully insured plan worth your while.
Our service simplifies the difficulty that can surround deciding between different employee health insurance options. After careful analysis of your business needs by our employee health insurance experts, you will have cost-effective options for group coverage.