With a fully insured plan, the company pays a premium, typically fixed for a year, to the insurance carrier. The insurance carrier is reponsible for collecting the premiums and pays the health care claims based on the coverage benefits outlined in the policy purchased.  The covered employees are responsible to pay any deductible amounts or co-payments required for covered services under the policy.

This is the good old fashioned way of offering your employees health insurance. Fully insured group health insurance is a one-size-fits-all solution, and does not take into account individual employee's needs or preferences. As such, sicker groups could benefit from fully insured plans. Employee medical expenses are submitted to an insurance company, and the business is reimbursed according to the plan's design.

Being “fully insured” means that you are passing all of the risk to your insurance carrier (ie Blue Cross Blue Shield), who charges a flat monthly fee based on the age of your employees. Each year the carrier has the ability to change the monthly fee depending on the health of your employees. When increases happen, the insurance carrier is not required to disclose any claims data to justify the change.

Conversely, if your employees are generally healthy, you’re still playing the same flat monthly rate no matter what. This model provides the least amount of risk for the business owner, which makes it the most common and popular.

Making Your Decision

Ultimately, if you want to operate a fully insured health plan, fully insured is an option that must be considered in light of your company’s cash flow, risk tolerance, employee numbers and preferred budgeting methods.

Contact ThinkTank Insurance Partners for more information about coverage options.