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FAQ: Our health coverage is partially self-funded. What do I need to provide to employees for ACA?
Our health coverage is partially self-funded. What do I need to provide to employees for ACA?
The Affordable Care Act (ACA) reporting requirements specifically address what forms and parts to complete depending on whether the health coverage offered by the organization is fully- or self-funded; for details, refer to the previously posted Affordable Care Act Employer Reporting Overview Training Tidbit. Typically, if a plan is partially self-funded, that means there is a group insurance arrangement under which the employer pays fixed administration costs and funds expenses for claims up to fixed dollar amounts, but the employer’s cost does not exceed the contractual premium amounts. In that case, the employer is not necessarily self-funding the group health plan, but rather is purchasing a group insurance policy that offers flexible financing of costs, and so the plan is essentially treated as being fully-funded for reporting purposes. IMPORTANT – Software Unlimited, Inc. strongly recommends that organizations who are partially self-funded to contact their insurance carrier to confirm who will be responsible for providing the necessary information to the employees.