#027 – Your employer is really your health insurance company. Two out of every three (67%) Americans who get their health insurance through their employer are in a self-funded insurance plan. As a result, this means your employer is paying the claims, not an insurance company.
Scott considers the unfortunate comments of someone who has met their insurance plan’s annual out of pocket maximum in June. As a result, they now want to load up on perceived “Free” benefits over the course of the next 6 months. Scott explains why that perception is backwards and how it harms their employer, coworkers and themself.
49.6% of Americans Get Health Insurance At Work
If you have health insurance through your employer, you are not alone. About half of the United State’s population receives health insurance through their employer, which covers 157 million Americans. So, if your employer has over 1,000 employees, it is nearly a certainty that your employer is your insurance company. You have a 1 in 4 chance that your employer is self-funded if you work for a company with fewer than 200 employees. Now, more and more small employers are learning about self-funding. So, talk to your boss, office manager or firm administrator about getting a self-funded health insurance plan for your company.
Self-funding, ASO and TPA
Your employer is really your health insurance company. So, a self-funded employer pays claims on behalf of the employee. The employer relies on an Administrative Services Only (ASO) contract with a Third Party Administrator (TPA), which can be an independent firm or sometimes is a division or department within an insurance company. The employer may experience large claims. So, employers purchase stop-loss insurance to protect the overall plan.
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Next episode, we’ll take a deeper look at the High Deductible Health Plans that make you eligible for a Health Savings Account. So be sure to catch us next week and tell a friend!
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