Sponsors of fully insured group health plans seeking greater control over their healthcare expenses and more flexibility with their plan design may consider self-insuring plan benefits. Self-insuring offers the potential for significant long-term cost savings and more customized benefits by giving sponsors a more direct role in managing financial exposure and tailoring plan coverage options.
Self-insuring also provides an opportunity to enhance plan governance and administration because the sponsor as plan administrator will be primarily responsible for implementing the plan and fulfilling applicable fiduciary and compliance obligations.
Employers evaluating whether to self-insure their major medical plan should understand the key differences, particularly from a compliance perspective, between fully insured and self-insured plans. This guide offers an overview of fiduciary responsibilities under ERISA for self-insured plans, as well as other health plan laws, including the ACA, COBRA, HIPAA, and transparency laws.
It is recommended that employers consult with their legal counsel and tax advisors for legal or tax advice specific to their plan(s) and circumstances.