What is Self-Funded (Self-Insured) Plan ?
‘Self-Funded Plan’ or ‘Self-Insured Plan’ refers to a kind of medical insurance plan in which the employer pays for any amount the employee had to incur as medical expenses instead of paying premiums for legacy medical insurance coverage.
As the charges incurred via this method is more than the traditional medical insurance and is being paid by the company, companies generally provide self-funded plans for senior executives only.
Contrary to a traditional insurance plan, the employee is not required to pay any amount as the premium in this case as the entire financial liability is handled by the employer themselves.