Fully-Insured vs. Self-Insured

Fully-Insured vs. Self-Insured

patient researching difference between fully insured vs self insured

There are two ways you could be covered for medical insurance through your employer:

    1.    You either have an insurance policy that you pay for yourself, or that’s paid in full or in part by your employer (known as a “fully-insured policy.”)
    2.    You may be covered by an employer’s self-insured medical benefits plan (known as a “self-insured policy.”)
To find out which your insurance is, contact your employee benefits administrator. This is key to knowing who makes the decisions about the treatment of obesity, and what the appeals process is for denials. 

How your employer pays for your plan also affects which documents control the coverage in the plan. If the plan is fully-insured, then the key document is the insurance policy. The insurance policy may also be called a Certificate of Coverage or Summary of Benefits. If the plan is an employer’s self-insured benefit plan, then the key document is the plan document, which is usually communicated in the form of a Summary Plan Description (SPD). 

If you’re covered by a fully-insured policy, you will need to begin the process by assessing your insurance policy. To do this, first you need to request the policy/contract. These documents can either be provided from your employer or insurance company. These documents are written in a legal style format and may be difficult to understand.

If the plan is self-insured by an employer, you should have a copy of the plan’s SPD, which will provide you with a better understanding of what the plan covers. If not, request a copy from your human resources department. (Many large employers have benefits web sites where all plan documents can be found.) These documents explain your enrollment with the provider, such as whether you’re enrolled in an HMO, PPO or indemnity plan.

In regards to severe/morbid obesity management exclusions, request that your insurance provider highlight the sections in your plan that discuss the exclusions and mail you a copy. If the insurance representative refuses to do this, thank them for their time, hang up and call again.

If the plan is self-insured, the employer is ultimately responsible for the healthcare costs, and therefore can customize the plan to include and exclude specific coverage, such as bariatric surgery coverage. If they exclude coverage for bariatric surgery, you may want to write them a letter explaining how this disease has affected your life. Please click here for a sample letter.

Learn more about your insurance and insurance pre-approval.

This content is adapted from The OAC (Obesity Action Coalition) Insurance Guide.