Self-Funding Insurance Plan Glossary

Self-funded plan: A health care benefits plan, also called a self-insured plan, that is funded by an employer that pays medical claims from company coffers rather than paying a fixed premium to an insurance carrier.

Fully insured plan: A plan in which the employer pays monthly premiums to an insurance carrier, which is responsible for paying medical claims.

Predictive modeling: The use of data to make predictions about certain behaviors and health outcomes.

Stop-loss insurance: A policy purchased by self-funded employers to protect against catastrophic or unpredictable losses. When losses exceed the employer's deductible, the insurance company becomes liable for paying the claims. There are two types of stop-loss insurance: specific and aggregate.

Third-party administrator: Administers claims and provides other services like helping employers set up their self-insured group health plans and coordinate stop-loss insurance coverage.