Self-Insured Reimbursement Plan

What Does Self-Insured Reimbursement Plan Mean?

A self-insured reimbursement plan is an insurance arrangement where a company directly reimburses its employees for medical expenses instead of paying premiums to an insurance provider to manage this on the company’s behalf. Companies often opt for self-insured reimbursement plans when they believe that insurance premiums are excessively high. Smaller employers in particular tend to run the numbers when health insurance rates start climbing year over year.

Insuranceopedia Explains Self-Insured Reimbursement Plan

Self-insured reimbursement plans can be more challenging for companies to establish and manage, but they have the potential to save money in the long run. These plans often extend benefits to family members of employees, in addition to the employees themselves. Companies that go this route still need to think about how it fits with the rest of their coverage, since a self-insured arrangement does not replace other types of business insurance like liability or property protection. Under a self-insured reimbursement plan, employees submit their claims directly to their employer, rather than to an insurance company. Regardless of the method, employees will receive reimbursement for covered medical expenses.