How Does A Self-Funded Health Insurance Plan Work?

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    Larry GilmorePRO
    Agent Owner, Gilmore Insurance Services, Marysville, Washington State
    How does a self funded health insurance plan work?   For the employee or plan participant, there is absolutely no difference in how a self funded plan and a regular health plan. The difference is behind the scenes. A self funded plan does not pay a premium to an insurance company for benefits, instead the funds are kept in house. The company may hire a third party administer to handle claims, but costs are picked up by the employer. Most companies that self insure also pay for "stoploss" insurance, which is a high deductible plan that kicks to pay claims for a large claim a employee may incur.
    Answered on June 10, 2013
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