A fully insured health plan is the most common type of group insurance. If you don’t have a large human resources (HR) team to devote to managing a plan, a fully insured option is often simpler to implement and much more predictable. You pay a fixed premium rate to a health insurance company and they carry the financial risk of insurance claims. They also handle all of the administration and payment of the claims based on the benefits covered, as outlined in your policy. This can be useful when your cash flow is tight because you know exactly what your plan will cost each year. 

Policies are different, depending on what the employer purchases, and the insurance carrier pays any health care claims based on that policy’s limit. Employees and their dependents are required to pay co-pays and deductibles for services that are included in the fully insured health plan.

As an employer, you should be aware of a fully insured health plan and the benefits it can have for your company and your employees. While this type of plan is generally more expensive, it typically pays off in the end when executed correctly. 

Pros of a fully-funded plan for a small business

  • Eliminates risk
  • Ideal for those likely to file many claims due to age or health status 
  • Cannot refuse coverage based on past claims or health status
  • Makes month-to-month budgeting predictable
  • Provides a health coverage option to high-liability group

Drawbacks of a fully-funded plan

  • Tends to be expensive 
  • Favors large companies over small businesses
  • Is subject to both state and federal taxes
  • Does not offer plan flexibility or personalization
  • Can make year-over-year budgeting unpredictable

At Ohio Health Benefits, we make it our goal to help your business find the insurance carrier that is just the right fit for your company based on number of employees, unique employee needs, the benefits you wish to provide or not provide, and more. Whether you’re curious about plan options or enrollment deadlines, our advisors are here to help. Talk with us by calling toll free at (866) 235-8378 or click here to email us your name and phone number for us to call you. We’ll help you understand your options to attract and retain employees.