Contract Funding Options

  1. Fully insured contracts – The insurance carrier assumes all liability for plan costs and charges the employer monthly premiums based on claims experience (utilization), administration charges, network access, and customer service resources. Premiums are renegotiated each year, based on claims for the previous year. Employer can only modify plan design to offset plan costs, if allowed by the carrier.
  2. Self-funded contracts – The employer assumes the liability for claims and pays an administrative fee to the carrier(s) to administer the plan. Employers have flexibility in plan design and eligibility rules, but are governed by federal regulations for self funded plans. The employer can reduce risk/liability by purchasing stop loss coverage for high dollar claims. Compliance responsibilities are assumed by the employer.