Ace the Illinois Health Insurance Exam 2026 – Insure Your Success Today!

In a self-insured plan, the employer assumes the financial risk associated with providing health benefits to employees. This means that instead of purchasing a traditional insurance policy from an insurance provider, the employer sets aside funds to pay for health care expenses directly. The employer takes on the responsibility for covering the costs of claims, which can include medical treatment, hospitalization, and other healthcare services.

Employers may choose to self-insure for various reasons, including potential cost savings, greater control over the benefits offered, and flexibility in plan design. By self-funding, employers can manage their healthcare costs more directly and tailor health benefits to fit the unique needs of their workforce. Additionally, many self-insured employers opt to purchase stop-loss insurance, which provides a safety net by covering claims that exceed a certain threshold, further mitigating financial risk.

The other options typically do not bear this direct financial responsibility in a self-insured arrangement. Insurance providers generally offer coverage through fully insured plans, the government may provide regulations and support, but it is not financially responsible for private employer plans, and employees typically share in costs such as premiums and co-pays but do not take on the financial risk of covering claims.