What defines a "self-insured plan"?

A self-insured plan is characterized by an employer taking on the financial risk of providing health care benefits to their employees rather than purchasing an insurance policy from an insurance company. In this setup, the employer sets aside funds to pay for health claims and medical expenses incurred by employees directly. This allows the employer greater control over the design of the benefits and potential cost savings, as they are not bound by the premiums and rules of an outside insurer.

Self-insured plans can also provide more flexibility in terms of coverage options and benefits tailored to the specific needs of employees. Additionally, self-insured plans often employ third-party administrators to manage claims and provide other services, but the financial responsibility ultimately rests with the employer. This distinction is what makes the self-insured plan unique, as opposed to the other options, which describe different types of health coverage or funding sources that do not involve the employer assuming direct financial responsibility for health care costs.