What is Self-Insured Health Insurance?

As companies struggle to keep themselves afloat, many have chosen to convert their medical packages into self-insured health insurance packages. This is sometimes known as a worker's compensation plan. The purpose of this type of insurance is to help curtail the large amounts of money that is never spent on insurance. Understanding what this term means can be the key to managing your new status.

The Employer and Self-Insurance

Employers who choose to use self-insured health insurance do not provide insurance premiums to another company. Instead, they retain the money and use it when the employees need it. In essence, the company is acting as your insurer and bears the financial burden of your hospital stay. Keep in mind that they must keep sufficient money available to pay for your treatment.

The Employee and Self-Insurance

There are some benefits for the employee. An employee is less likely to have their wages garnished in order to pay for insurance premiums every week. You may instead contribute to the workers plan. Also, the employer will choose the doctor and amount of treatment, which can place severe restrictions to your medical care.