A person or company that has taken on the risk and expense of insurance instead of paying premiums to an insurer. Individuals often choose to become self-insured if they have the savings available to cover the cost of a financial loss, such as a car accident that totals their vehicle or an illness that requires hospitalization. Companies may choose to be self-insured if they believe it will reduce workers’ compensation costs.
Generally, the company that is self-insured will hire a third party to handle claims and network negotiations (pharmacy benefits managers are one example). The employer will also retain the underwriting profit of the insurance industry, which can be a positive factor in cost reduction.
The main advantage of being self-insured is lower costs and more flexibility in creating a health plan that meets the company’s needs. However, the company can face a major hit if it experiences a large and unexpected loss.
It’s important to discuss the benefits and risks of self-insurance with an insurance professional. A good starting point is reviewing the specific application, security deposit, and reporting requirements for workers’ compensation self-insurance in your state. You can also find resources for processing workers’ compensation claims, including links to online services. To reduce the financial risk associated with a self-insured plan, many employers implement stop-loss or excess-loss insurance. This type of coverage will pay a specified amount for any claim over the self-insured company’s retained losses. This is similar to the way a deductible works for an insurance policy. самоосигуряващо се лице или фирма