Helpful Facts for Deciding Between Self- and Fully-Funded Healthcare Options

Any employer trying to figure out the best way to set up healthcare plans for employees is sure to run into the question of whether to get self-funded vs fully-funded health plans. These are the two most common plan types you’re likely to run into, and though they might sound similar on the surface, there are some essential distinctions that can present both pros and cons for your company.

The Fully Funded Plan Is a Traditional Choice for Many Employers

If you worked as an employee prior to running a business, you may have been on a fully funded health plan. These plans are a frequent, more traditional choice for many employers and involve the company itself paying fixed premium rates to the insurer. These plans typically:

  • Require employees to pay deductibles
  • Allow stable monthly premiums

Self Funded Plans Let Employers Insure Themselves

If your company would rather self-insure, a self-funded plan is a way to go, especially since this plan type may have much lower premiums. One con to consider before you opt for it is that you might end up having to pay out more claims than initially planned, creating an extra expense.

Choosing a health plan can be confusing, especially if this is your first time reviewing self-funded vs fully-funded health plans for your company. With these extra facts in mind, you can determine which route is best for your business.

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