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Fully Insured Health Plan

What Does Fully Insured Health Plan Mean?

A fully insured health plan is a health insurance plan in which an employer pays a specific premium amount to an insurance company to get coverage for a specific number of employees. Fully insured health plans are an alternative to self-funded plans, in which an employer acts as its own health insurance company.

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Insuranceopedia Explains Fully Insured Health Plan

With fully insured plans, the health insurance company handles all of the administrative responsibilities and pays out all of the claims. With a self-funded insurance policy, these responsibilities typically fall on the employer. Fully insured plans are often more expensive because they require premium payments. However, self-funded insurance plans can be more difficult for the employer to manage since the employer would be responsible for both paying out the claims and managing the policies itself.

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