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Self-funded health care insurance plans offer an alternative to traditional health care models. In a self-funding model, the company is responsible for covering all claims in the health care plan and controls any premium reserves. Because these plans are excluded from some requirements of the Affordable Care Act (ACA), employers can save costs related to premium taxes and state insurance regulations.
Self-funded plans can help reduce and manage employee health care costs, while still delivering valuable health care coverage.
Employers should be aware of all the ACA compliance requirements, specifically the benefit mandates, and grandfathering if applicable, that directly affect them. And with no annual or lifetime dollar limits on essential health benefits offered by the plan, employers need to consider an appropriate level of stop-loss coverage.
Plans are administered and managed by the employer.
Employers will submit required reporting to the Internal Revenue Service starting in 2016. For more information about reporting requirements:
Employers with 50 or more full-time equivalent employees may be subject to shared-responsibility penalties if coverage either does not meet affordability or minimum value requirements. Employers must offer coverage to 95 percent of full-time employees and their dependents.
Voluntary insurance can be offered as part of a comprehensive benefits package. These benefits provide peace of mind to employees by helping with out-of-pocket costs associated with illness or injury. Learn more at Aflac.com.
A comprehensive summary is available in The Benefits Decision Guide.
Learn more at aflac.com/health-care-reform.
This material is intended to provide general information about an evolving topic and does not constitute legal, tax or accounting advice regarding any specific situation. Aflac cannot anticipate all the facts that a particular employer or individual will have to consider in their benefits decision-making process. We strongly encourage readers to discuss their HCR situations with their advisors to determine the actions they need to take or to visit healthcare.gov (which may also be contacted at 1-800-318-2596) for additional information.