In the health insurance marketplace there are primarily two types of funding an employer group can choose: self–insured and fully-insured. The essential difference between the plans is who assumes the risk for the claims generated by the employees. In a fully–insured plan the risk falls on the insurance company. Employers with self-insured employee health programs pay for medical claims and fees out of current revenue—in effect, acting as their own insurers. Self-insured is the alternative to a fully insured plan where employers pay a fixed premium to a third-party commercial insurance carrier that covers the medical claims.
For reporting, an ALE that sponsors self-insured health coverage will use the same form it uses to report about offers of coverage (Form 1095-C) to satisfy the ACA reporting requirement by filling out an additional section (Part III) for employees and family members who enroll in the coverage.
