See...your employer has 2 options to cover you- he might choose to go for an agreement with an insurance carrier or he might cover you from his own fund as well. We have seen people getting covered by their employers who had contracts with carriers like Aetna.
ArindamSenIndies
Yes, there are differences for the fully insured programs. All insurance policies are governed by the federal laws e.g. Cobra and Hipaa. But the state insurance regulations would be applicable on the fully covered plans only. So, you see how the state laws concerning health conditions don't hold good on the self-funded plans.
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The employers with enough financial sources to cover the expenses that may arise from the various medical conditions of the employees may choose to self fund the health insurance. However, the state mandated laws don’t apply for the self insured plans, while HIPPA and COBRA may still apply to the plans.
The self funded plans are often associated with the HSA account. The employee and the employer jointly set up the account and make regular contributions towards it. the HAS accounts are related to the high deductible health plans and since higher deductible lowers the premium expense it reduces the cost of maintaining the policy. _________________ Register Now to have your Insurance queries solved.
Self-insured plans are NOT governed by the individual states, they are under (for the most part) ERISA, may or may NOT be exempt from COBRA, and MUST adhere to all HIPAA requirements. They are not exempt from discrimination laws (ERISA) and are commonly a blending of a self-insured plan coupled with an "excess" or "stop-loss" insurance policy. The self-insured fund would pay to a specified amount each year, and when that amount is reached, then an actual insurance contract would come into play.
It is NOT wise for most employers to embrace self-insured plans. They should primarily be put into play for those employers that have fairly predictable medical costs, a younger (therefore usually healthier) employee base, and can weather the storm financially in the event of a catastrophic medical year. PLEASE seek the advice of a person who has actual in-depth knowledge of "risk-retention" pools (another way of looking at self-insurance) prior to implementing one of these type of plans. They can be very risky for the wrong person, and I have seen some truly ugly repercussions for those who didn't install the plan correctly.
