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How are self-insured and fully insured health plans different?

Many employers that sponsor group health plans decide to buy a group health insurance policy from an insurance company or health maintenance organization (HMO). Such plans are referred to as "fully insured" group health plans. Typically, health plans sponsored by small employers are fully insured. Other employers that sponsor group health plans decide to "self-insure." That is, the employer pays claims under the group health plans out of the employer's own funds. Typically very large employers sponsor self-insured group health plans.

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Important: This content reflects information from various individuals and organizations and may offer alternative or opposing points of view. It should not be used for medical advice, diagnosis or treatment. As always, you should consult with your healthcare provider about your specific health needs.