Fully-insured vs. self-insured options

Fully-Insured Self-Insured
Employers pay a fixed premium to the insurance carrier and the insurer covers the claims. Employers pay for claims and fees out of organizational revenue, acting as their own insurers.


Fully-insured plans are typically more expensive and rigid because they prevent organizations from customizing benefit plans and offer restricted flexibility to limit the occurrence of high-risk claims. They are popular because they eliminate the administrative responsibilities and expenses from dealing with all the employee claims.

Self-insured benefits are where the organization administers their own plan and assumes the financial risk of providing benefits to its employees. The most common self-insured benefits are short-term disability, health, and dental benefits. They are less costly than life and long-term disability and more predictable and manageable in terms of risks.

Benefit plans are available to small organizations through affiliation with umbrella organizations such as chambers of commerce, boards of trade, trade associations, and professional organizations. For larger organizations, the range of options is mainly limited by cost considerations.

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