What is a Self-Funded (Self Insured) Plan?
A Self-Funded Plan is a group health plan where employees pay for medical expenses out of pocket as they happen instead of paying a premium. The employee would then submit a claim to their employer, who would reimburse the expense pursuant to the agreement with the employee. Generally speaking, an employer sets aside a certain amount of money to pay for claims. One way to think about it that the employer is assuming the risk that is usually the responsibility of the health insurance provider.