Open enrollment for 2016 benefits is coming to an end, and many businesses and workers are finding themselves with higher insurance costs than ever before. Many small businesses that offer health insurance plans may think that purchasing an expensive plan from an insurance carrier is their only option. But depending on your circumstances, self-insurance could help you save a significant amount of money on your premiums.
What is self-insurance?
According to Healthcare.gov, self-insurance is a "type of plan ... where the employer itself collects premiums from enrollees and takes on the responsibility of paying employees' and dependents' medical claims." Insurance services such as enrollment, claims processing and provider networks can be handled in-house, but are more frequently managed by a third-party administrator (TPA) or an insurance company.
According to Healthcare.gov, self-insurance is a "type of plan ... where the employer itself collects premiums from enrollees and takes on the responsibility of paying employees' and dependents' medical claims." Insurance services such as enrollment, claims processing and provider networks can be handled in-house, but are more frequently managed by a third-party administrator (TPA) or an insurance company.
With self-insurance, the employer takes on much of the risk that insurance carriers typically assume. In an article on ZaneBenefits.com, author Christina Merhar outlines the difference between fully insured and self-insured health plans:
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